Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., August 14, 2025. <\/p>\n
Brendan McDermid | Reuters<\/p>\n
U.S. stocks were relatively unchanged Tuesday as Wall Street looked beyond President Donald Trump’s removal of Federal Reserve Governor Lisa Cook<\/a> from the central bank’s board and awaited quarterly figures from chip giant Nvidia<\/a>.<\/p>\n The S&P 500<\/a>, along with the Dow Jones Industrial Average<\/a>, traded just above the flatline. The Nasdaq Composite<\/a> rose 0.2%.<\/p>\n Long-term Treasury yields rose<\/a> after the Trump move, while short-term yields declined as investors steepened the yield curve on the notion rates may go lower in the short-term, but eventually go higher as a politicized Fed becomes less attentive to inflation.\u00a0The\u00a0U.S. dollar\u00a0index<\/a>, which measures the greenback against a basket of major currencies, was last down 0.3%.<\/p>\n Trump’s unprecedented move adds to the pressure the president has been putting on the central bank’s independence. By law, a president may only remove Fed governor “for cause.” As a result, it is possible the matter will be challenged in the courts.<\/p>\n There are currently six members on the Fed’s board, with one seat vacant after the resignation of Adriana Kugler<\/a> earlier this month. Removing Cook would leave five members, with non-Trump appointees still holding a majority. However, if Stephen Miran is cleared for the Kugler vacancy and the president is successful in removing Cook, it would give Trump a 4-3 majority.<\/p>\n If Fed Chair Jerome Powell leaves his seat voluntarily after his term expires in May, it would give the president a fifth vote.<\/p>\n Investors already appeared hopeful about the prospect of lower interest rates coming<\/a> in September, as hinted at by Powell<\/a> last week in Jackson Hole, Wyoming<\/a>. They’re additionally looking ahead to Nvidia’s earnings report on Wednesday, which could bolster the megacap tech trade following its recent slide. The “Magnificent Seven” stocks rallied Friday, but only after five straight days of losses.<\/p>\n “In the immediate term, markets will probably get over the Cook news fairly quickly (assuming this is a discrete event and Trump doesn’t attempt to fire Powell), turning its attention back to Nvidia, the PCE, and jobs, but the Fed’s independence is undeniably being undermined, a process with negative long-term consequences,” said Adam Crisafulli, founder of Vital Knowledge.<\/p>\n