Updated 2 min read
US stock futures nudged lower Tuesday as Wall Street absorbed President Trump’s bid to remove Federal Reserve governor Lisa Cook and his fresh threat to impose digital tax-related tariffs.
Dow Jones Industrial Average futures (YM=F) edged down 0.2%, while those on the S&P 500 (ES=F) were off by 0.1%. Contracts on the tech-heavy Nasdaq 100 (NQ=F) also slipped 0.2%, after stocks pulled back from a record-setting rally on Monday.
Investors are treading carefully after Trump took to social media to ramp up pressure in his Fed feud and in his trade offensive.
The president said late Monday that he had determined there was “sufficient cause” to oust Cook, after the top Fed official resisted persistent demands for her resignation over allegations of mortgage fraud. Cook responded by saying Trump didn’t have the authority to fire her and that she wouldn’t step down.
Longer-dated US bond prices fell amid concerns that Trump’s moves against Fed independence and for interest-rate cuts could stoke inflation. The yields on 10-year (^TNX) and 30-year (^TYX) Treasurys rose to about 4.3% and 4.9%, respectively.
On the trade front, Trump vowed to impose fresh tariffs and export curbs on chips and technology from countries that “unfairly” placed taxes on US digital services, speaking in a Monday social media post.
Read more: The latest on Trump’s tariffs
The reprisal risks escalating trade tensions between the US and the European Union, as the major trading partners inch toward understanding on tariffs. Wall Street is already monitoring risks in Europe as political turmoil risks collapse for France’s government.
Meanwhile, Wall Street is bracing for Nvidia (NVDA) earnings, which land Wednesday after the bell. Expectations for its results are sky-high, with the company’s stock up almost 34% so far this year, even as restrictions on chip sales to China have possibly cost the company billions.
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EchoStar stock surges on $23 billion spectrum sale to AT&T
Shares of EchoStar (SATS) rocketed higher in premarket trading, up 65% as investors welcomed news the company has sold a tranche of wireless spectrum to AT&T (T) in a $23 billion deal.
“This transaction is part of EchoStar‘s ongoing efforts to resolve the Federal Communications Commission’s inquiries,” DISH TV owner EchoStar said in a statement on Tuesday.
Meanwhile, AT&T shares were little changed. Reuters reports:
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Treasury yields rise after President Trump moves to oust Fed’s Lisa Cook
Treasury yields rose, and the dollar fell on Tuesday after President Trump said late Monday he removed Federal Reserve Governor Lisa Cook from her post.
The 10-year yield (^TNX) ticked up 1 basis point to 4.27%, while the 30-year yield (^TYX) rose 2 basis points to 4.91%. The dollar index (DX-Y.NYB) fell 0.27%.
Yahoo Finance’s Allie Canal reports that Trump’s decision to follow through on a threat to oust Cook if she refused to resign comes after members of his administration alleged that Cook engaged in mortgage fraud related to the purchase of two properties earlier this decade.
“You are hereby removed from your position on the Board of Governors of the Federal Reserve, effective immediately,” the president wrote in a letter addressed to Cook and shared on social media. “I have determined there is sufficient cause to remove you from your position.”
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Nvidia in line for $260 billion price swing after earnings
Options traders are pricing in about a $260 billion swing in Nvidia’s (NVDA) market value following the chipmaker’s second-quarter earnings expected on Wednesday, market data has shown.
Reuters reports:
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Small caps are finally getting rate cuts, but they might still be left behind
Small-cap stocks are finally playing catch-up, leaving a market — which has been burned before — wondering if this time is for real, writes Yahoo Finance’s Hamza Shaban in today’s Morning Brief.
He reports:
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Good morning. Here’s what’s happening today.
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Premarket trending tickers: Wolfspeed, Interactive Brokers Group and Constellation Brands
Here’s a look at some of the top stocks trending in premarket trading:
Wolfspeed (WOLF) shares jumped more than 3% premarket after its fourth quarter results. The chipmaker, which has been grappling with a Chapter 11 and a restructuring, reported a loss per share $4.30, compared to a loss of $1.39 per share during the same period a year ago. Revenue came in at $197 million, compared to $201 million the previous year. Wall Street analysts expected worse results.
Interactive Brokers Group (IBKR) stock rose 3% before the bell on news it will be joining the S&P 500 (^GSPC) at the start of trading on Thursday, replacing Walgreens Boots Alliance.
Constellation Brands (STZ) stock fell over 1% premarket on Tuesday and was down more than 1% after dropping 2% Monday. RBC Capital cut its price target on the beer, wine and spirits company to $230 from $233, though it maintained an Outperform rating.
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Gold pushes up following Trump’s escalation of attack upon the Fed
Gold (GC=F) rose overnight Monday as news of President Trump’s announced intent to remove Federal Reserve Governor Lisa Cook from her position. With uncertainty around the legality of the move, or the broad impact upon markets, investors pushed up the haven asset as a safeguard against instability.
Bloomberg reports:
