U.S. stock index futures pointed to a slightly weaker open on Tuesday, signaling further downside after Monday’s losses.
Investors are weighing fresh political developments, particularly uncertainty surrounding the Federal Reserve. Sentiment was rattled after former President Donald Trump announced he would remove Fed Governor Lisa Cook from her role.
In a message posted on Truth Social, Trump alleged Cook made “false statements on one or more mortgage agreements.”
Cook, however, disputed Trump’s authority to dismiss her, saying she would continue to serve in her role.
“I will continue to carry out my duties to help the American economy as I have been doing since 2022,” Cook said.
Adding to market jitters, Trump escalated his trade rhetoric, warning he could impose “substantial additional tariffs” on countries that maintain digital taxes or regulations targeting U.S. technology firms.
“America, and American Technology Companies, are neither the ‘piggy bank’ nor the ‘doormat’ of the World any longer,” Trump wrote on Truth Social. “Show respect to America and our amazing Tech Companies or, consider the consequences!”
On Monday, Trump also threatened 200% tariffs on China if Beijing restricts exports of rare-earth magnets to the United States.
Stocks struggled in the previous session, with major indexes turning lower into the close after an early stretch of lackluster trading. The Dow dropped 349.27 points, or 0.8%, to 45,282.47, while the S&P 500 slipped 0.4% to 6,439.32 and the Nasdaq eased 0.2% to 21,449.29.
Part of the weakness reflected profit-taking, as traders locked in gains following Friday’s rally, which was fueled by remarks from Fed Chair Jerome Powell hinting at a potential rate cut in September.
Still, selling pressure was relatively muted, as investors held back ahead of key events later this week. Nvidia’s (NASDAQ:NVDA) earnings on Wednesday evening will be closely watched, along with upcoming U.S. economic releases. The Commerce Department’s inflation data on Friday will be especially significant, as it includes the Fed’s preferred price gauge. Reports on durable goods orders, consumer confidence, and GDP growth are also expected to influence sentiment.
Tuesday morning, the Commerce Department reported that new home sales dipped 0.6% in July to an annual rate of 652,000, down from a revised 656,000 in June. Economists had forecast a smaller decline, with expectations for 630,000.
Sector performance was mixed on Monday. Biotech stocks retreated sharply, with the NYSE Arca Biotechnology Index tumbling 2.2% after reaching a six-month high last week. Transportation shares also slid, with the Dow Jones Transportation Average losing 1.8%. Meanwhile, pharmaceutical, healthcare, and utilities stocks were under pressure, while oil producers found support from a strong rebound in crude prices.
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