US stocks recouped much of Monday’s losses yesterday and the S&P 500 index is now perched just under record highs. With little going on so far this week, investors turned to the latest drama between Trump and the Federal Reserve. On Monday, the president published a letter to governor Lisa Cook, announcing the immediate removal of the board member from her post. The letter has sparked a debate relating to whether the president had the authority to do so, once again bringing back the question of the Fed’s supposed independence. The move to remove Cook comes in light of an investigation by the Department of Justice, who called on Jerome Powell to dismiss the governor last week following allegations of mortgage fraud involving several properties. The situation has not resulted in any change in expectations to the next interest rate cut in September.
Nvidia will publish its second quarter earnings later today after the closing bell. Despite the ongoing reshuffling of worldwide trade, shares are currently just under record highs at $181 while the company’s market cap now sits at a staggering $4.4 billion. The Trump administration initially banned Nvidia from selling chips to China before softening its tone and implementing a 15% fee to be paid to the government instead. Just how much this will impact the chipmaker’s bottom line remains to be seen, but according to the Q1 earnings call the measure is expected to slash $8 billion off the bottom line.
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