US markets opened cautiously on Tuesday as investors weighed heightened political pressure on the Federal Reserve, shifts in Treasury yields, and anticipation surrounding Nvidia’s closely watched earnings report.
The benchmark S&P 500 was down 0.06% at 6,435.74. The Dow Jones Industrial Average slipped 0.06%, while the Nasdaq 100 was in red by 0.09%.
Long-term Treasury yields climbed while short-term yields declined, steepening the yield curve as investors digested the implications of President Donald Trump’s unprecedented move against the Federal Reserve.
Traders are increasingly pricing in the possibility of lower interest rates in the short term, but expect rates could climb further out if the Fed becomes less focused on inflation under political pressure.
The US dollar index, which tracks the greenback against a basket of major currencies, fell 0.3%.
Trump’s order to fire Fed Governor Lisa Cook has raised fresh concerns about the central bank’s independence.
By law, a president may only remove a Fed governor “for cause,” meaning Trump’s attempt is likely to face legal challenges.
Currently, the Fed board has six members, with one seat vacant following Adriana Kugler’s resignation earlier this month.
Removing Governor Lisa Cook would leave five members, though non-Trump appointees would still hold a majority.
If Stephen Miran is confirmed to fill the vacant seat and Trump succeeds in removing Cook, the president would secure a 4-3 majority.
Further changes could occur if Chair Jerome Powell steps down when his term expires in May, potentially giving Trump additional influence.
Despite the uncertainty, some investors expect markets to quickly move past the news.
“In the immediate term, markets will probably get over the Cook news fairly quickly (assuming this is a discrete event and Trump doesn’t attempt to fire Powell), turning its attention back to Nvidia, the PCE, and jobs,” said Adam Crisafulli, founder of Vital Knowledge said in a CNBC report. “But the Fed’s independence is undeniably being undermined, a process with negative long-term consequences.”
Nvidia earnings in focus
Attention remains firmly on Nvidia, whose quarterly results are due after Wednesday’s market close.
Shares of the artificial intelligence chipmaker rose in the open on Tuesday, extending gains after a recent pullback.
The company’s performance is being closely monitored, given its outsized role in driving broader market sentiment, particularly within the “Magnificent Seven” technology stocks.
Better-than-expected durable goods data also supported sentiment, helping offset concerns tied to Trump’s announcement of new tariffs and export restrictions on chips for countries that maintain digital taxes.
Wall Street enters the session following Monday’s declines.
The Dow Jones Industrial Average shed 349 points, or 0.8%, while the S&P 500 fell 0.4%. The Nasdaq slipped 0.2%, despite a brief rise earlier in the session fueled by Nvidia.
Movers in early trading
Several individual stocks stood out in early trading. EchoStar surged 76% after AT&T announced it would acquire certain wireless spectrum licenses from the company in a $23 billion deal.
Eli Lilly gained 3% following positive late-stage trial results for its weight-loss pill, orforglipron.
Advanced Micro Devices also advanced, buoyed by broader optimism in the semiconductor sector.
In retail, Canada Goose rose nearly 5% after an upgrade to Outperform by Baird, while V.F. Corporation rose 6% while Rocky Brands climbed around 8% each on similar analyst calls.
Among other movers, Oklo added nearly 5% after Bank of America initiated coverage with a Buy rating, citing the nuclear technology company’s positioning to meet rising AI-driven energy demand.
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