Dow futures experienced a decline on Tuesday as investors cautiously processed President Donald Trump’s decision to dismiss Fed Governor Lisa Cook. In contrast, safe-haven gold ascended to levels not seen in two weeks. Trump has suggested the potential for additional tariffs, possibly targeting the European Union and China. Meanwhile, Nissan’s stock has faced challenges as Mercedes Benz begins to divest its stake in the Japanese auto manufacturer.

President Donald Trump announced late Monday that he was terminating Federal Reserve Governor Lisa Cook due to alleged improprieties in securing mortgage loans, marking his latest challenge to the autonomy of the U.S. central bank. Trump communicated in a letter to Cook, the first African-American woman to serve on the Federal Reserve’s governing body, that he had “sufficient cause to remove you from your position,” following inquiries raised by U.S. Federal Housing Finance Agency director William Pulte regarding Cook’s mortgages last week. Cook was appointed by former U.S. President Joe Biden in 2022, and responded by stating that she will “continue to carry out my duties to help the American economy.” No president has attempted to remove a Fed governor before, so the implications of this unprecedented action remain uncertain. However, it is probable that a challenge from Cook regarding Trump’s firing will ultimately be adjudicated by the Supreme Court. This action by Trump comes in the wake of multiple threats to dismiss Fed Chair Jerome Powell, representing a significant intensification of the president’s conflict with the Federal Reserve, which he holds responsible for the sluggish pace of interest rate reductions.

U.S. stock futures experienced a decline on Tuesday, compounding the losses from the prior session, as apprehensions regarding the autonomy of the Federal Reserve emerged following President Donald Trump’s announcement of the dismissal of Governor Lisa Cook. At 02:35 ET (06:35 GMT), the S&P 500 futures exhibited a decline of 8 points, representing a decrease of 0.1%. Meanwhile, Nasdaq 100 futures experienced a drop of 45 points, or 0.2%, and Dow futures also fell by 70 points, equating to a 0.2% reduction. The major indices experienced a decline on Monday, marking the beginning of the week with a downturn following Friday’s significant rally. The blue chip Dow Jones Industrial Average experienced a decline of 0.8%, while the broad-based S&P 500 saw a decrease of 0.4%. Additionally, the tech-heavy NASDAQ Composite recorded a slip of 0.2%. In addition to analyzing the potential consequences of Trump’s actions towards Cook, market participants will also evaluate a series of economic reports released later on Tuesday, as the September Federal Reserve meeting approaches. The forthcoming releases include durable goods orders and consumer confidence metrics, alongside the Case-Shiller Home Price Index and the Richmond Fed Manufacturing Index. Richmond Federal Reserve President Thomas Barkin is scheduled to deliver remarks.

As the uncertainty surrounding the trade policies of the Trump administration seemed to be diminishing, the U.S. president issued a warning to countries implementing digital taxes, stating that they could face “subsequent additional tariffs” on their goods if such legislation is not rescinded. Numerous nations, especially within Europe, have imposed taxes on the sales revenue generated by digital service providers such as Alphabet’s Google, Meta’s Facebook, Apple, and Amazon. This matter has persisted as a significant trade friction across various U.S. administrations. “With this TRUTH, I put all Countries with Digital Taxes, Legislation, Rules, or Regulations, on notice that unless these discriminatory actions are removed, I, as President of the United States, will impose substantial additional Tariffs on that Country’s Exports to the U.S.A., and institute Export restrictions on our Highly Protected Technology and Chips,” Trump stated in a social media post. In February, Trump directed his trade chief to reinvigorate investigations focused on the potential imposition of tariffs on imports from nations that implement digital service taxes targeting U.S. technology firms. The U.S. president has issued a warning to China regarding the imposition of 200% tariffs should Beijing fail to export rare-earth magnets to the U.S., highlighting the ongoing trade tensions between the two countries. China’s heightened sensitivity regarding rare earth elements and its dominance over supply has led to the inclusion of various rare earth items and magnets on its export restriction list as of April, a strategic response to tariff increases imposed by the United States.

Nissan shares fell sharply on Tuesday after the company’s second-largest shareholder, Mercedes Benz, announced its intention to begin offloading its stake in the beleaguered Japanese automaker. Nissan’s shares experienced a decline of more than 5% on Tuesday, marking it as the least favorable performer on Japan’s benchmark Nikkei 225 index. Mercedes Benz has indicated its intention to commence the sale of its approximately $346 million, or 3.8%, stake in Nissan starting this week. The German automotive manufacturer has clarified that this stake has been allocated to its pension unit and is not deemed strategically significant. The decision exacerbates the challenges facing the Japanese automaker, which has already been grappling with the adverse effects of U.S. tariffs, a downturn in sales, and the shift towards electric vehicles, all while contending with intense global competition, especially from Chinese competitors. A planned merger with Honda, which stood to create the world’s second-largest automaker, largely fell apart in early 2025.

Gold prices experienced an uptick on Tuesday, driven by heightened safe haven demand amid growing apprehensions regarding the independence of the Federal Reserve, particularly following Trump’s announcement of his decision to dismiss Governor Lisa Cook. At 02:35 ET, spot gold experienced an increase of 0.3%, reaching $3,375.71 per ounce, while gold futures for October saw a rise of 0.2%, settling at $3,423.95 per ounce. The dismissal of Cook represents another instance of Trump’s efforts to exert control over the Federal Reserve, coinciding with his desire to enhance his influence over the central bank’s interest rate decisions. Substituting Cook with a nominee of his choosing may enhance Trump’s sway over the Federal Reserve’s seven-member board, which presently comprises two of his appointees – Governor Christopher Waller and Vice Chair for Supervision Michelle Bowman. Waller and Bowman both supported a reduction in interest rates during the Federal Reserve’s July meeting, aligning their decision with the requests made by Trump. Trump had earlier raised the possibility of terminating Fed Chair Jerome Powell, igniting apprehensions regarding the central bank’s autonomy, which could undermine U.S. economic credibility in the long term.