IXIC: Nasdaq Futures Dive After Trump Says He’s Fired Fed’s Lisa Cook. But It’s Not That Simple

In another move to assert broader control over the Fed, Trump posted on Truth Social an image showing Cook’s termination letter, effective immediately. Can he do that? It’s not that simple.

📉 Futures Sink as Fed Drama Escalates

• Futures contracts tied to the Nasdaq Composite IXIC woke up to a late-night presidential surprise, which sent shockwaves through markets Tuesday.
• Donald Trump announced the firing of Federal Reserve Governor Lisa Cook via Truth Social — an unprecedented move that could spark a legal showdown and intensify tensions over central bank independence.
• Nasdaq futures fell 0.2%, S&P 500 futures dipped 0.1%, and Dow futures slipped 64 points early Tuesday as markets reacted to Trump’s abrupt move. The sell-off adds to Monday’s weakness when the S&P 500 dropped 0.4%, the Dow slid 0.8%, and the Nasdaq lost 0.2%.

📣 Trump Fires a Fed Governor?

• In a Truth Social post, Trump shared an image of Cook’s termination letter, effective immediately, citing “sufficient reason” related to alleged false statements on mortgage agreements. Cook strongly denied the accusations and said Trump “has no authority to fire me.”
• Under US law, a sitting president cannot remove a Fed governor without cause — and even then, the decision is subject to legal review. Expect court challenges and constitutional debates over Trump’s sweeping claim of executive power.
• The dismissal marks a major escalation in Trump’s battle with the Federal Reserve, which he has repeatedly criticized for being too slow to cut interest rates amid slowing economic growth and stubborn inflation.

⚔️ Central Bank Independence Under Threat

• Cook, a Biden appointee and one of the seven Fed governors, plays a key role in setting US monetary policy, including benchmark interest rates that dictate borrowing costs globally.
• Her removal attempt threatens to deepen political interference concerns at the Fed. More precisely, Trump has long clashed with Fed Chair Jay Powell, demanding faster and deeper rate cuts.
• Analysts warn that these moves risk undermining investor confidence in the Fed’s independence — a pillar of US economic stability.

🔑 Nvidia Earnings Almost Here

• This week’s losses aren’t just about politics. Investors are also bracing for Nvidia’s second-quarter earnings Wednesday, with Wall Street expecting blockbuster results amid the ongoing AI-driven capex boom.
• Nvidia stock NVDA climbed about 1% Monday after a flurry of analyst upgrades, briefly helping lift the Nasdaq before the index reversed lower. Analysts project $46 billion in revenue and $1 earnings per share, but forward guidance is the real catalyst traders are watching.
• If Nvidia delivers a Q3 revenue forecast anywhere near $54 billion, the stock could reignite tech-sector momentum and pull the Nasdaq back toward its record highs. But a miss? Expect deeper volatility across the entire AI trade.