Trump/Cook, Nissan's weakness, more tariffs and gold - what affects the markets

Investing.com — U.S. stock futures fell on Tuesday. Safe-haven gold rose to a two-week high as investors cautiously assessed US President Donald Trump's decision to dismiss Fed Governor Lisa Cook. Trump also hinted at the possibility of more tariffs against the European Union and China, while Nissan shares suffered as Mercedes Benz began disposing of its stake in the Japanese car company.

Trump dismisses Fed's Cook

President Donald Trump announced Monday night that he had fired Federal Reserve Governor Lisa Cook over alleged irregularities in obtaining mortgage loans. This was the last attack on the independence of the US central bank.

In a letter to Cook, the first African-American woman to serve on the board of the Federal Reserve, Trump said: “I have sufficient justification to remove you from office.” William Pulte, director of the US Federal Housing Finance Agency, raised questions last week about Cook's mortgage loans.

Appointed by former U.S. President Joe Biden in 2022, Cook responded, “I will continue to fulfill my duties to help the American economy.”

It is unclear what happens next, as no president has attempted to oust a Fed governor before. But Cook's appeal of Trump's impeachment is likely to move to the Supreme Court.

Trump's move follows numerous threats to impeach Fed President Jerome Powell. This marks a sharp escalation in the president's fight against the Fed, which he blames for not cutting interest rates quickly.

2. US futures fell

U.S. stock futures fell on Tuesday. Concerns about the independence of the Federal Reserve have grown after President Donald Trump announced that he had fired Governor Lisa Cook, while losses from the previous session continued.

At 9:35 a.m. in Turkey time, S&P 500 futures were down 8 points, or 0.1%, Nasdaq 100 futures were down 45 points, or 0.2%, and Dow futures were down 70 points, or 0.2%.

Major indexes closed lower on Monday. After Friday's big rally, the new week started with a loss. The Dow Jones Industrial Average fell 0.8%, the S&P 500 down 0.4% and the tech-heavy NASDAQ Composite fell 0.2%.

As investors assess the possible consequences of Trump's move against Cook, they will also scrutinize a raft of economic reports due out Tuesday as the Federal Reserve meeting in September approaches.

The latest durable goods orders and consumer confidence data will be revealed. Also expected are the Case-Shiller Home Price Index and the Richmond Fed Manufacturing Index.

Richmond Federal Reserve Chairman Thomas Barkin is also scheduled to speak.

3. Are there more tariffs coming?

As the confusion around the Trump administration's trade policies appears to be easing, the US president has threatened countries with digital taxes to impose “additional additional tariffs” on their goods if they do not lift such legislation.

Many countries in Europe, in particular, impose taxes on sales revenues of digital service providers, including Alphabet's Google, Meta's Facebook, Apple and Amazon. This issue has been a long-standing source of commercial discomfort for multiple U.S. administrations.

Trump said in a social media post: “With this FACT, all Countries with Digital Taxes, Legislation, Rules or Regulations, unless these discriminatory acts are removed, as President of the United States, I will impose significant additional Tariffs on that Country's Exports to the United States and impose export restrictions on our Highly Protected Technology and Chips I warn you that I will.”

In February, Trump instructed trade officials to restart investigations aimed at imposing tariffs on imports from countries that impose tariffs on U.S. technology companies on digital services.

The US president also threatened to impose 200% tariffs on China if Beijing does not export rare earth magnets to the US amid a trade dispute between the two countries.

China is becoming increasingly sensitive about rare earth elements and its control over supply. In April, it added several rare earth elements and magnets to its export restriction list in retaliation to U.S. tariff hikes.

4. Mercedes begins divesting its stake in Nissan

Nissan (TYO:7201) shares fell sharply on Tuesday after Mercedes Benz (ETR:MBGN), the company's second-largest shareholder, announced it would begin disposing of its stake in the troubled Japanese automaker.

Nissan shares closed down more than 5% on Tuesday, marking the worst performance on Japan's benchmark Nikkei 225 index.

Mercedes Benz said it would start selling its 3.8% stake in Nissan, worth about $346 million, starting this week. The German auto giant announced that the stake has been transferred to the pension unit of Mercedes and is not of strategic importance.

The move puts further pressure on the Japanese automaker's stock, which is under pressure from U.S. tariffs, falling sales and a shift to electric vehicles, especially in an environment of intense global competition from Chinese rivals.

The planned merger with Honda (TYO:7267), which would create the world's second-largest automaker, fell heavily into the water in early 2025.

5. Gold hits a two-week high

Gold prices rose on Tuesday. Demand for safe harbors grew as concerns about the Federal Reserve's independence grew after Trump announced that he had fired Governor Lisa Cook.

At 09:35am Turkish time, spot gold rose 0.3 percent to $3,375.71 an ounce, while October gold futures rose 0.2 percent to $3,423.95 an ounce.

Cook's ouster is Trump's latest attack on the Fed, coming at a time when the president is trying to gain more influence over the Fed's rate-setting activities.

Replacing Cook with his own nominee could give Trump more influence on the Fed's seven-member board, which currently includes two of his nominees. These nominees are Governor Christopher Waller and Vice President for Supervision Michelle Bowman.

Waller and Bowman voted for a rate cut at the Fed's July meeting in line with Trump's demands.

Trump had previously raised the possibility of ousting Fed President Jerome Powell, raising concerns about the central bank's independence, which could damage U.S. economic credibility in the long run.

(Reuters contributed to the report.)

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