Trump fires Fed Governor Lisa Cook

General market commentary

Global equity markets began the week on weaker ground, with US indices pulling back as investors awaited NVIDIA’s closely watched earnings release. The Dow Jones Industrial Average fell 0.8%, the S&P 500 slipped 0.4%, and the Nasdaq Composite eased 0.2%, giving back some of Friday’s gains when the Dow had notched a record close after Fed Chair Jerome Powell hinted at a potential September rate cut. Sector leadership came from communication services and energy, while consumer staples, health care and utilities trailed. In fixed income, US Treasury yields climbed, with the 10-year yield at 4.28% compared with July’s peak of around 4.50%. The US dollar strengthened against major currencies, and in commodities, WTI crude oil advanced on concerns over Ukrainian strikes on Russian energy infrastructure and the risk of fresh US sanctions disrupting supply.

In other markets, Asian equities posted gains, with Hong Kong’s Hang Seng and China’s Shanghai Composite both reaching new highs for the year, while European equities declined despite Germany’s business climate index rising for the eighth consecutive month to its strongest level in over two years. Investor attention this week is focused on NVIDIA, with analysts forecasting earnings per share of $1.01, up 49% year-on-year, as markets look for confirmation that AI-related demand remains resilient. Earnings season overall has been solid, with 82% of S&P 500 companies beating estimates and second-quarter growth revised up to 10.5% from 3.8% at the start of the reporting period. Later in the week, US PCE inflation data will be released, with headline inflation expected at 2.6% and core PCE seen rising to 2.9%. Bond markets are pricing in two rate cuts this year and three more in 2026, a path that, if realised, could ease borrowing costs and support further gains in equities and corporate profitability.

Latest market and economic update

Asian shares mostly declined on Tuesday as optimism over US rate cuts faded and caution grew ahead of Nvidia’s earnings. Chinese and Hong Kong equities eased from multi-year highs, while Japan and South Korea saw the steepest tech-led losses. Australian shares slipped on weaker miners, offsetting gains in Coles. Broader regional sentiment remained cautious.

US equity futures declined further overnight as investors paused after last week’s strong rally, with attention on Nvidia’s earnings Wednesday and upcoming PCE inflation data Friday. In after-hours trading, Interactive Brokers rose nearly 4% after being announced to replace Walgreens Boots Alliance in the S&P 500 Index, highlighting selective gains amid broader caution.

European equities fell on Monday, trimming last week’s gains as investors reassessed global rate prospects and corporate updates. The STOXX 50 dropped 0.8% to 5,444, while the STOXX 600 eased 0.5% to 559. Banks weighed heavily, with BBVA, BNP Paribas and UniCredit lower, though acquisition news lifted JDE Peet’s and Puma sharply.

The US dollar index slipped below 98.3 on Tuesday after President Trump’s dismissal of Fed Governor Lisa Cook raised concerns over central bank independence. Markets now see an 83% chance of a September rate cut, pressuring the greenback. EUR/USD strengthened to 1.1628, with traders also eyeing key US data releases later this week.

Oil prices slipped in Asian trade this morning, with Brent down 0.5% to $68.46 and WTI 0.6% lower at $64.44, as traders balanced potential new US sanctions on Russia with tentative peace efforts in Ukraine. Meanwhile, Washington will raise tariffs on Indian goods to 50% from August 27 over New Delhi’s Russian oil purchases.

President Donald Trump announced the immediate removal of Federal Reserve Governor Lisa Cook, alleging false statements on mortgage applications. Cook denied the claims, which are expected to spark a legal battle. The move marks Trump’s latest attempt to exert influence over the Fed, pressing for rapid rate cuts despite resistance from Chair Jerome Powell.

French bond yields hit their highest since March yesterday after Prime Minister Francois Bayrou called a confidence vote on his budget plans. The 10-year yield rose 9 bps to 3.508%, while the French-German spread widened nearly 7 bps, its sharpest move since June 2023, as opposition parties pledged to oppose Bayrou’s minority government.

US President Donald Trump said he would like to meet North Korean leader Kim Jong Un this year, speaking ahead of talks with South Korean President Lee Jae Myung at the White House. Trump praised his relationship with Kim, describing North Korea as having “tremendous potential,” while noting he had spent significant time in private discussions with him.

Equities on the move

The following companies experienced moves in their share price driven by analyst ratings, quarterly earnings, or other news:

Nissan shares fell around 6% in Asia this morning after Mercedes-Benz said it would sell its $346 million, 3.8% stake in the automaker. The drop highlights doubts over Nissan’s turnaround as it faces tariffs, weak US and China sales, and a $535 million quarterly loss. CEO Ivan Espinosa has announced deep restructuring to restore profitability.

Boeing secured a record $50 billion deal with Korean Air for 103 aircraft, including 787s, 777s and 737s, along with GE engine purchases and maintenance worth $13.7 billion. The order, timed with South Korean President Lee’s Washington visit, will support fleet expansion, integration with Asiana Airlines, and strengthen Boeing’s position in global aerospace exports.

Interactive Brokers shares surged 5% after being added to the S&P 500, replacing Walgreens Boots Alliance, with the change effective August 28. Talen Energy will join the S&P MidCap 400, gaining 4.1%, while Kinetik Holdings rises 5.9% ahead of its inclusion in the S&P SmallCap 600 on September 2. Index adjustments typically boost demand from ETFs and funds.

Ørsted shares plunged more than 16% after the Trump administration ordered a halt to its near-complete Revolution Wind project off Rhode Island, citing a stop-work order from BOEM. The Danish state-backed firm, already planning a $9.4bn rights issue to stabilise finances, now faces uncertainty over its U.S. portfolio, raising doubts about the capital increase’s success.

Puma shares jumped 16% after reports that Artemis, the Pinault family’s holding company, is exploring options for its 29% stake, including potential buyers. The stake, worth around €800 million, follows Artemis’s broader portfolio diversification and past debt management efforts. Puma’s shares have fallen over 60% in two years prior to the surge.

Keurig Dr Pepper is acquiring JDE Peet’s for $18 billion, creating a global coffee rival to Nestlé and Europe’s largest deal in over two years. The merger will form two US listed companies, Global Coffee Co and Beverage Co, aiming for $400 million in annual savings. JDE Peet’s shares surged 15.5%, while KDP fell 9.5%.

PDD Holdings beat Q2 revenue estimates as its Chinese and international platforms, Pinduoduo and Temu, saw 7% growth to 103.98 billion yuan. Net profit fell 21% due to increased investment to counter competition and rising costs from tariffs and merchant support. The company expects continued profit fluctuations amid intensified price wars.

The US government may take stakes in more semiconductor firms or expand into other sectors, White House economic adviser Kevin Hassett told CNBC. He highlighted the recent Intel investment, noting it could mark the start of a broader strategy. Hassett added that CHIPS Act funding for Intel and other projects is being allocated on schedule.

Gene Munster of Deepwater Asset Management sees Nvidia’s 2026 growth as underestimated, forecasting 30-35% top-line expansion. Price hikes on China sales may offset U.S. revenue sharing, while AI investment and the networking segment drive growth. Stifel raised its price target to $212, citing strong GB300 chip demand and resilient AI momentum, keeping a Buy ahead of Q2 results.

Wall Street banks initiated coverage of Figma with cautious stances on valuation despite recognising its design leadership and growth potential. Morgan Stanley, JP Morgan, Goldman Sachs and RBC all started at Neutral/Equal-weight with price targets from $48 to $80. Analysts cited strong AI opportunities and expansion potential but flagged rich valuations and growth concerns.

Upcoming data and events

Key economic data today include U.S. durable goods orders, providing insight into manufacturing activity, and French consumer confidence for August, which gauges household sentiment.

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