US stock futures fall on Fed independence concerns after Trump ousts Cook

Investing.com — U.S. stock index futures fell Monday evening after President Donald Trump's sudden ouster of Federal Reserve Governor Lisa Cook heightened concerns about central bank independence.

Futures fell following a negative session on Wall Street. Investors were risk-averse ahead of closely watched earnings reports due out this week by NVIDIA Corporation (NASDAQ:NVDA). Markets also remained jittery about further interest rate cuts from the Fed after dovish but vague statements by Fed President Jerome Powell on Friday.

S&P 500 Futures fell 0.3 percent to 6,433.0 at 03.44 Turkish time. Nasdaq 100 futures fell 0.5 percent to 23,387.0 points. Dow Jones Futures fell 0.3 percent to 45,226.0 points.

Trump fires Fed Director Cook, Fed independence concerns rise

The losses in Wall Street futures came just after Trump posted a letter on social media announcing Cook's dismissal.

Trump said the dismissal was linked to allegations of mortgage fraud against Cook and that there was “sufficient cause” for his dismissal. These allegations had been raised in early August by William Pulte, Director of the Federal Housing Finance Agency.

Cook had previously denied these allegations and stated that he would not be removed from office by bullying.

But Trump's announcement of Cook's ouster marks the president's latest attack on the Fed. Trump seems to be trying to exert more influence over the central bank. Cook was a member of the Fed's seven-member rate-setting board.

Trump's moves have raised concerns about the Fed's independence. Political interference with the central bank threatens to undermine the economic credibility of the United States. The Fed has traditionally operated outside the purview of the government.

Trump tried to remove Fed President Jerome Powell earlier this year. Powell had largely rejected the president's calls to cut interest rates immediately.

After Trump's move on Monday, the dollar fell and Treasury bond yields rose.

Wall Street jittery amid interest rate uncertainty and Nvidia earnings caution

Wall Street indexes fell on Monday. There was a cooling after the sharp rally in the previous session after Fed Chairman Powell acknowledged the possibility of interest rate cuts in the near term.

However, Powell still largely refrained from committing to further easing. This limited Wall Street's overall rise.

Investors were also largely cautious ahead of closely watched earnings from artificial intelligence giant Nvidia Corp, which will be announced on Wednesday. The company is considered an indicator for the artificial intelligence and technology sector.

Nvidia's earnings come amid growing doubts about artificial intelligence's long-term prospects. Those doubts had caused a sharp drop in tech stocks last week.

But the tech sector recovered slightly on Monday, limiting overall losses on Wall Street. The S&P 500 fell 0.4 percent to 6,439.32 points, while the NASDAQ Composite closed down 0.2 percent at 21,449.29. The Dow Jones Industrial Average fell 0.8 percent to 45,282.47 points from a record high reached in the previous session.

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