U.S. stock futures edged lower Tuesday as investors assessed the implications of President Donald Trump’s dismissal of Federal Reserve Governor Lisa Cook. Gold, meanwhile, climbed to a two-week high as demand for safe-haven assets rose. Trump also hinted at possible new tariffs targeting the European Union and China. On the corporate front, Nissan shares dropped sharply after Mercedes Benz revealed plans to start selling its stake in the Japanese automaker.
Trump removes Fed Governor Cook
Late Monday, Trump announced he was firing Fed Governor Lisa Cook over alleged mortgage irregularities, intensifying his campaign against the Fed’s independence.
In a letter to Cook, the first African-American woman on the Federal Reserve board, Trump wrote that he had “sufficient cause to remove you from your position” following concerns raised by U.S. Federal Housing Finance Agency director William Pulte.
Cook, who was appointed in 2022 by President Joe Biden, responded: “I will continue to carry out my duties to help the American economy.”
No U.S. president has attempted to remove a Fed governor before, and analysts expect that Cook may challenge the firing in the Supreme Court.
This follows previous threats by Trump to dismiss Fed Chair Jerome Powell and represents an escalation in his effort to push for lower interest rates.
Futures slip amid uncertainty
At 02:35 ET, S&P 500 futures fell 8 points (0.1%), Nasdaq 100 futures lost 45 points (0.2%), and Dow futures were down 70 points (0.2%).
Indices had closed lower on Monday, with the Dow dropping 0.8%, the S&P 500 down 0.4%, and the NASDAQ Composite falling 0.2%, as markets digested Friday’s gains and the new week began.
Investors are also anticipating economic releases, including durable goods orders, consumer confidence, the Case-Shiller Home Price Index, and the Richmond Fed Manufacturing Index, while Richmond Fed President Thomas Barkin is scheduled to speak.
More tariffs on the horizon?
Trump threatened that nations with digital taxes could face “subsequent additional tariffs” unless they remove these measures.
“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 wrote on social media.
He has also warned China of potential 200% tariffs if it does not export rare-earth magnets to the U.S., following rising tensions over trade and supply restrictions.
Mercedes begins offloading Nissan shares
Nissan (USOTC:NNCHY) saw its shares drop over 5% after Mercedes Benz (TG:MBG), Nissan’s second-largest shareholder, said it would begin selling its 3.8% stake worth around $346 million.
Mercedes said the shares had been moved to its pension unit and were “not of strategic importance.” The sale adds pressure to Nissan, which faces falling sales, U.S. tariffs, and stiff EV competition, especially from Chinese manufacturers. A planned merger with Honda (NYSE:HMC) that would have created the world’s second-largest carmaker largely collapsed in early 2025.
Gold rises on safe-haven demand
Spot gold gained 0.3% to $3,375.71 an ounce, while October gold futures increased 0.2% to $3,423.95/oz at 02:35 ET, as concerns over Fed independence boosted demand for precious metals.
Trump’s move to remove Cook could give him more influence over the Fed’s seven-member board, which already includes his appointees Governor Christopher Waller and Vice Chair for Supervision Michelle Bowman.
Both Waller and Bowman voted for a rate cut in July, aligning with Trump’s preference. Trump had also suggested the possibility of firing Fed Chair Jerome Powell, raising questions about the Fed’s autonomy, which could affect U.S. economic credibility over time.
This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.