U.S. stock futures dipped on Tuesday as investors reacted cautiously to President Donald Trump’s decision to dismiss Federal Reserve Governor Lisa Cook, while gold surged to a two-week high amid safe-haven demand. Trump also hinted at potential new tariffs, possibly targeting the European Union and China, while Nissan shares tumbled following Mercedes Benz’s announcement that it would begin selling its stake in the Japanese automaker.
Trump fires Fed Governor Cook
Late Monday, President Trump announced he was terminating Fed Governor Lisa Cook over alleged mortgage improprieties, marking his latest challenge to the Fed’s independence.
In a letter to Cook, the first African-American woman to serve on the Federal Reserve’s board, Trump stated he had “sufficient cause to remove you from your position” after U.S. Federal Housing Finance Agency director William Pulte raised questions about her mortgages last week.
Cook, appointed by former President Joe Biden in 2022, responded: “I will continue to carry out my duties to help the American economy.”
No U.S. president has previously attempted to remove a Fed governor, leaving the path forward uncertain. Analysts suggest that Cook may challenge the firing in the Supreme Court.
This action follows multiple threats by Trump to dismiss Fed Chair Jerome Powell and represents a clear escalation in his efforts to pressure the central bank, which he criticizes for not cutting interest rates quickly enough.
U.S. futures decline
U.S. stock futures fell Tuesday, extending Monday’s losses as concerns about the Fed’s independence weighed on sentiment. At 02:35 ET, S&P 500 futures were down 8 points (0.1%), Nasdaq 100 futures slipped 45 points (0.2%), and Dow futures lost 70 points (0.2%).
Major indices closed lower Monday after Friday’s rally: the Dow Jones Industrial Average fell 0.8%, the S&P 500 dropped 0.4%, and the NASDAQ Composite edged down 0.2%.
Investors are also awaiting a slate of economic reports ahead of the September Federal Reserve meeting, including durable goods orders, consumer confidence, the Case-Shiller Home Price Index, and the Richmond Fed Manufacturing Index. Richmond Fed President Thomas Barkin is scheduled to speak as well.
Potential new tariffs
Trump warned that countries imposing digital taxes could face “subsequent additional tariffs” if such laws are not removed.
“With this TRUTH, I put all Countries with Digital Taxes, Legislation, Rules, or Regulations, on notice that unless these discriminatory actions are removed, I, as President of the United States, will impose substantial additional Tariffs on that Country’s Exports to the U.S.A., and institute Export restrictions on our Highly Protected Technology and Chips,” Trump said in a social media post.
Earlier this year, Trump instructed his trade team to resume investigations into tariffs on countries that levy digital service taxes affecting U.S. tech firms. He has also threatened China with 200% tariffs if Beijing does not export rare-earth magnets to the U.S., amid ongoing trade tensions.
Mercedes begins selling Nissan stake
Nissan (USOTC:NNCHY) shares fell sharply Tuesday after Mercedes Benz (TG:MBG), the automaker’s second-largest shareholder, said it would start divesting its 3.8% stake, valued at roughly $346 million.
Mercedes Benz confirmed the stake was transferred to its pension unit and deemed “not of strategic importance.” The sale adds pressure to Nissan shares, already weighed down by U.S. tariffs, falling sales, and global EV competition, particularly from Chinese rivals. A previously planned merger with Honda (NYSE:HMC), which would have created the world’s second-largest automaker, largely unraveled in early 2025.
Gold climbs to two-week high
Gold prices climbed Tuesday as safe-haven buying accelerated amid concerns over the Fed’s independence after Trump announced Cook’s dismissal.
At 02:35 ET, spot gold rose 0.3% to $3,375.71 an ounce, while October gold futures gained 0.2% to $3,423.95/oz.
The firing represents Trump’s latest attempt to exert influence over Fed policy. Replacing Cook with his own nominee could increase his sway on the Fed’s seven-member board, which already includes his appointees, Governor Christopher Waller and Vice Chair for Supervision Michelle Bowman.
Waller and Bowman both voted for a rate cut during the Fed’s July meeting, aligning with Trump’s preferences.
Earlier, Trump had raised the possibility of removing Fed Chair Jerome Powell, raising concerns about the central bank’s independence, which could ultimately impact U.S. economic credibility.
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