By Mike Dolan
LONDON (Reuters) – What matters in U.S. and global markets today
By Mike Dolan, Editor-At-Large, Finance and Markets
While markets cheered Federal Reserve Chair Jerome Powell’s apparent dovish tilt on interest rates last week, everything’s gone flat today, and President Donald Trump’s claim to have fired Fed board member Lisa Cook isn’t helping.
Trump’s attempt to fire Cook is based on allegations of improper mortgage borrowing. The legality of this move is unclear, but it has still sparked fresh concerns about the central bank’s independence, as her removal would potentially give the president a majority on the Fed board next year.
Cook’s refusal to accept Trump’s announcement sets up a major battle between the White House and the Fed. In response, the 2-to-30-year Treasury yield curve moved to its steepest since January 2022, the dollar dropped lower and U.S. stock futures fell into the red.
* Despite Powell’s Jackson Hole nod to labor market softness on Friday, forcing many Wall Street banks to change their forecasts to see a quarter point rate cut next month, Fed futures are still not fully priced for that outcome – with only an 80% chance of a cut seen. That’s partly because August U.S. payrolls and consumer price reports could yet be a game changer in that decision. This week’s big economic release is the July PCE inflation report on Friday, with Nvidia’s quarterly results tomorrow dominating the corporate diary and holding tech stocks back in advance. The S&P 500 closed in the red on Monday.
* Part of the reason why the dollar’s initial losses on the Cook announcement weren’t larger was that the euro has tensions of its own. France’s main stock index fell 2% and 10-year French bond yields hit their highest since March as three main opposition parties said they would not back a confidence vote, which Prime Minister Francois Bayrou announced for September 8 over his plans for sweeping budget cuts. Shares of French banks BNP Paribas and Societe Generale slumped 6.2% and 5.2%, respectively, with talk of another snap election in the mix.
* With last week’s tech angst still in the air and Nvidia’s report due, Trump on Monday threatened countries that have digital taxes with “subsequent additional tariffs” on their goods. The anxiety ratcheted up on news Trump is considering sanctions on European Union or state officials responsible for implementing the bloc’s Digital Services Act on complaints the law censors Americans and imposes costs on U.S. tech firms. Elsewhere, Intel said the U.S. government’s 9.9% stake in the chipmaker could pose risks to its business, from potentially harming international sales to limiting its ability to secure future government grants.
Today’s daily column looks at the lonely plight of the value investor, as a leading light of that strategy refuses to fold.
Today’s Market Minute
* U.S. President Donald Trump on Monday said he was firing Federal Reserve Governor Lisa Cook over alleged improprieties in obtaining mortgage loans, an unprecedented step that could test the boundaries of presidential power over the independent monetary policy body.
* Indian exporters are bracing for disruptions after a U.S. Homeland Security notification confirmed Washington would impose an additional 25% tariff on all Indian-origin goods from Wednesday, ramping up trade pressure on the Asian nation.
* U.S. and Russian government officials discussed several energy deals on the sidelines of negotiations this month that sought to achieve peace in Ukraine, according to five sources familiar with the talks.
* Federal Reserve Chair Jerome Powell is coming under fire for appearing to cave to political pressure in his Jackson Hole speech on Friday, which opened the door to an interest rate cut next month, a shift from his more hawkish stance only a few weeks ago. But the charge is unfair argues ROI markets columnist Jamie McGeever.
* China’s imports of liquefied natural gas (LNG) are poised to rise for a fourth straight month in August, but, writes ROI columnist Clyde Russell, this may not be quite as bullish as it first appears.
Chart of the day
Now the world’s most valuable company with a market cap of $4.39 trillion, Nvidia’s stock has climbed more than 30% so far in 2025, pushing its gain to over 1,400% since October 2022.
The California-based company has epitomized the broader AI excitement that has driven up shares of a raft of tech companies and others involved in AI infrastructure, such as power generation and cooling systems. But its explosive growth is inevitably set to slow and Wednesday’s results will be forensically examined for bumps in the road ahead.
Nvidia options implied a roughly 6% swing for the shares in either direction following the results, which will be reported after markets close.
Today’s events to watch
* U.S. July durable goods orders (8:30 AM EDT), June house prices (9:00 AM EDT), Richmond Fed August business surveys (10:00 AM EDT), Dallas Fed’s August services (10:30 AM EDT)
* Richmond Federal Reserve President Thomas Barkin speaks; Bank of Canada Governor Tiff Macklem speaks; Bank of England policymaker Catherine Mann speaks
* U.S. Treasury sells $69 billion of 2-year notes
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Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
(by Mike Dolan; editing by Sharon Singleton)
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