US stocks closed stronger on Tuesday as investors looked past President Donald Trump’s shock move to oust Federal Reserve Governor Lisa Cook and focused instead on upcoming earnings from Nvidia.
The S&P 500 gained 0.41% to 6,465.94, the Nasdaq Composite added 0.44% to 21,544.27, and the Dow Jones Industrial Average climbed 135 points, or 0.3%, to 45,418.07.
Fed independence under pressure
Long-term Treasury yields rose while shorter yields fell, steepening the curve as investors priced in near-term cuts but greater long-term risks from a politicised central bank. The US dollar slipped 0.2%.
Cook’s attorney confirmed she will challenge her removal in court, arguing Trump has no authority to fire a Fed governor. By law, removal is permitted only “for cause.” If successful, Trump’s action could tilt the seven-member board toward his appointees, raising questions about the Fed’s independence.
Markets currently see an 88% chance of a September rate cut, up from 84% just a day earlier, according to CME’s FedWatch Tool.
Nvidia earnings in focus
Attention now shifts to Nvidia, with results due after the close on Wednesday. The stock rose 1.1% Tuesday, extending recent gains, though it remains shy of its record high. Analysts say expectations are elevated, and guidance will be critical to the market reaction.
Apple also gained 1% after announcing it will release new iPhones on September 9.
Tariffs and tech tensions
Adding to the market backdrop, Trump said he plans to impose “substantial” new tariffs and export restrictions on countries that refuse to remove digital taxes. The announcement underscored broader uncertainty for the chip sector even as investors await Nvidia’s results.
Australian outlook
The SPI 200 futures point to a 0.5% gain, up 47 points to 8,942. Today’s reporting season highlights include Nine Entertainment, Woolworths, and WiseTech Global, with Flight Centre, Adairs, Domino’s Pizza, Tabcorp and Lovisa also due to report.
On the data front, Australia’s July CPI indicator and second-quarter construction work will be released at 11:30am. NAB expects headline inflation at 2.3%, lifted by base effects in electricity and robust travel demand.
