Trump’s Fed power play jolts bonds, Wall Street on edge ahead of Nvidia earnings

The market’s attention is expected to shift to earnings and economic releases this week, with chipmaker Nvidia reporting quarterly results on Wednesday.

US President Trump’s abrupt removal of Federal Reserve Governor Lisa Cook sent global markets into cautious retreat, with the broader fallout seen impacting upcoming tech earnings and economic data.

While legal challenges may follow, investors worry the reshuffle could give Trump a firmer grip on the Fed’s board, especially if his pending nominees are confirmed and Chair Jerome Powell steps down after  his term expires next May.

Dow Jones Industrial futures slipped 0.2 percent, while contracts tied to the S&P 500 and Nasdaq 100 also declined 0.2 percent each. The cautious start followed Monday’s selloff which saw the Dow lose 349 points and the S&P 500 and Nasdaq end lower after last week’s brief rally.

Bond markets reflected the tension with long-dated Treasury yields higher as traders priced in the risk of a more politicised Fed falling behind on inflation, while short-term yields slipped on expectations of near-term rate cuts. The US dollar index weakened 0.3%, while gold edged higher as investors sought safety.

The market’s attention is expected to shift to earnings and economic releases this week, with chipmaker Nvidia reporting quarterly results on Wednesday. Durable goods orders, consumer confidence data and the Case-Shiller Home Price Index are also due Tuesday, while Richmond Fed President Thomas Barkin is set to speak later today.

Advanced Micro Devices’ shares gained more than 2 percent in premarket trading after Truist upgraded the stock to “buy” citing stronger demand from hyperscale customers. EchoStar surged over 70 percent after agreeing to sell spectrum licenses to AT&T for $23 billion while Eli Lilly rose nearly 2 percent on positive trial results for its weight-loss pill.

European equities fell, led by France’s CAC 40 amid political uncertainty over a looming confidence vote. Britain’s FTSE dropped 0.6 percent and the STOXX 600 down 0.7 percent earlier in the day.

Emerging markets, including India, saw their currencies under pressure, with the rupee under stress ahead of new US tariffs. Other Asian markets closed lower, with Hong Kong’s Hang Seng leading losses after Trump threatened steep new tariffs on China and other nations imposing digital taxes.