OP Wire 8/26 (OP – Lite)

By Steve

Trump Fires Fed Governor Lisa Cook

President Donald Trump shook markets late Monday, announcing the removal of Federal Reserve Governor Lisa Cook over alleged improprieties in mortgage loans. This unprecedented move marks the first time a U.S. president has attempted to fire a Fed governor, raising fresh concerns about the independence of the central bank.

In a letter, Trump said he had “sufficient cause” for removal following questions raised by Federal Housing Finance Agency Director William Pulte. Cook, appointed in 2022 by former President Biden and the first African-American woman on the Fed board, vowed to “continue to carry out my duties to help the American economy.” Legal experts suggest the matter could head to the Supreme Court, given the Fed’s protected status.

This escalation follows Trump’s repeated threats to dismiss Fed Chair Jerome Powell, intensifying his pressure campaign for faster rate cuts.

U.S. Futures Edge Lower

Stock futures slipped early Tuesday as investors digested the implications of Trump’s firing of Cook.

S&P 500 futures: -8 points (-0.1%)
Nasdaq 100 futures: -45 points (-0.2%)
Dow futures: -70 points (-0.2%)

Major indices closed lower Monday, unwinding part of Friday’s rally. The Dow fell 0.8%, the S&P 500 dropped 0.4%, and the Nasdaq Composite slid 0.2%.

Today’s calendar is stacked with data: durable goods orders, consumer confidence, the Case-Shiller Home Price Index, and the Richmond Fed Manufacturing Index. Richmond Fed President Thomas Barkin is also scheduled to speak.

Tariff Threats Return

Trump also reignited trade tensions, warning that countries with digital service taxes will face “substantial additional tariffs” if they don’t roll back those policies. Targets include European nations taxing tech giants like Google, Meta, Apple, and Amazon.

He has already ordered renewed investigations into such measures, and separately threatened 200% tariffs on Chinese rare-earth magnets, a commodity Beijing has recently restricted for export. Global supply chains are again in focus.

Mercedes Cuts Nissan Stake

In Asia, Nissan shares tumbled over 5% after Mercedes-Benz said it will start selling down its $346 million (3.8%) stake in the Japanese automaker. The move, transferring shares to Mercedes’ pension unit, was described as non-strategic.

Nissan has been pressured by U.S. tariffs, weak sales, and EV competition from China. Its abandoned merger with Honda earlier this year further clouds the outlook.

Gold Pushes Higher

Gold rose to a two-week high on safe-haven demand tied to Fed uncertainty:

Spot gold: +0.3% at $3,375.71/oz
October futures: +0.2% at $3,423.95/oz

Trump’s push to replace Cook with his own nominee could tilt Fed board votes toward deeper rate cuts, but markets worry about the long-term credibility of U.S. monetary policy.

Market Snapshot & OP Notes

$QQQ closed at 570.32 (-0.29%), holding about 2% above support at 560 and 2.3% shy of all-time highs (583.32).
Bitcoin: ~$109.5K
Gold: ~$3,425/oz
Silver: ~$38.75/oz

Key Data Today:

🏭 Core & Headline Durable Goods (8:30 AM ET)
🏠 S&P/Case-Shiller HPI (9 AM ET)
🛍️ Consumer Confidence (10 AM ET)
📊 Atlanta Fed GDPNow (11:30 AM ET)
💵 2Y Treasury Auction (1 PM ET)
🛢️ API Crude Stocks (4:30 PM ET)

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