U.S. equity futures were slightly in the red on Tuesday, extending Monday’s declines as investors reacted to renewed political uncertainty surrounding the Federal Reserve and fresh tariff threats from former President Donald Trump.
Trump announced he was removing Fed Governor Lisa Cook, accusing her on Truth Social of making “false statements on one or more mortgage agreements.” Cook pushed back, insisting Trump has no authority to dismiss her.
“I will continue to carry out my duties to help the American economy as I have been doing since 2022,” she said.
Trade tensions added to the cautious mood. Trump threatened “substantial additional tariffs” on nations that maintain digital levies and regulations targeting U.S. tech firms.
“America, and American Technology Companies, are neither the ‘piggy bank’ nor the ‘doormat’ of the World any longer,” he wrote. “Show respect to America and our amazing Tech Companies or, consider the consequences!”
He also warned China of 200% tariffs if it withholds rare-earth magnet exports.
On Monday, Wall Street gave back some of last week’s strong gains, with the Dow down 349 points, the S&P 500 off 0.4%, and the Nasdaq slipping 0.2%. Analysts said the pullback was partly profit-taking after Friday’s rally, which followed Fed Chair Jerome Powell’s hints at a September rate cut.
Investors are now focused on upcoming catalysts: Nvidia’s (NASDAQ:NVDA) quarterly results due Wednesday, along with U.S. economic data later this week, including inflation figures the Fed closely monitors.
Sectors showed mixed moves to start the week: biotech and transportation shares led declines, while oil producers gained on a sharp rebound in crude prices.
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