Gold prices hit 2-week high as Trump-Fed feud escalates with Cook firing
Investing.com-- U.S. stock index futures turned lower on Monday evening after President Donald Trump’s abrupt removal of Federal Reserve Governor Lisa Cook sparked heightened concerns over the central bank’s independence.
Futures fell after a negative session on Wall Street, where investors turned risk-averse before closely-watched earnings from NVIDIA Corporation (NASDAQ:NVDA) this week. Markets also remained on edge over more interest rate cuts from the Fed, following dovish albeit vague comments from Fed Chair Jerome Powell on Friday.
S&P 500 Futures fell 0.3% to 6,433.0 points, while Nasdaq 100 Futures fell 0.5% to 23,387.0 points by 20:44 ET (00:44 GMT). Dow Jones Futures fell 0.3% to 45,226.0 points.
Trump fires Fed Governor Cook, sparks Fed independence fears
Losses in Wall Street futures came just after Trump released a letter on social media announcing Cook’s removal, effective immediately.
Trump said the firing was tied to allegations of mortgage fraud against Cook, and that there was “sufficient cause” for her removal. The allegations were raised earlier in August by Federal Housing Finance Agency Director William Pulte.
Cook had then denied the allegations, and had stated that she would not be bullied out of her position.
But Trump’s announcement of her removal marks his latest attack against the Fed, with the president seen repeatedly attempting to exert more influence over the central bank. Cook is a member of the Fed’s seven-member rate-setting board.
Trump’s moves sparked heightened uncertainty over the Fed’s independence, with political interference in the central bank threatening to undermine U.S. economic credibility. The Fed has traditionally operated outside the government’s sphere of influence.
Trump had earlier this year also attempted to remove Fed Chair Jerome Powell, who had largely rejected the president’s calls to cut rates immediately.
The dollar retreated and Treasury yields rose after Trump’s move on Monday.
Wall St skittish amid rate uncertainty, Nvidia earnings caution
Wall Street indexes fell on Monday, cooling after a sharp rally in the prior session as the Fed’s Powell acknowledged the possibility of interest rate cuts in the near-term.
But Powell still remained largely non-committal towards further easing, limiting Wall Street’s overall upside.
Investors also turned largely cautious before closely-watched earnings from artificial intelligence major Nvidia Corp , due on Wednesday. The company is regarded as a bellwether for AI and tech.
Nvidia’s earnings come amid growing doubts over the long-term prospects of AI– doubts which caused a sharp selldown in tech stocks last week.
But tech saw some recovery on Monday, helping limit overall losses in Wall Street. The S&P 500 fell 0.4% to 6,439.32 points, while the NASDAQ Composite finished down 0.2% at 21,449.29 points. The Dow Jones Industrial Average fell 0.8% to 45,282.47 points, falling from a record high hit in the prior session.