Stock Market Today: Nasdaq Gains as Trump Fires Fed Governor, Nvidia Earnings in Focus

Nasdaq, S&P 500, Dow React Cautiously to Trump–Fed Clash

Markets moved sideways on Tuesday as President Donald Trump escalated his confrontation with the Federal Reserve, announcing the removal of Governor Lisa Cook. The S&P 500 (SPX 6,439.61, flat) and Dow Jones Industrial Average (DJI 45,265, -0.04%) hovered around unchanged levels, while the Nasdaq Composite (IXIC 21,468, +0.09%) managed modest gains. The muted equity reaction contrasted with shifts in bond and currency markets, where the 10-year Treasury yield climbed to 4.27% and the dollar index weakened by 0.3%, reflecting investor unease over Fed independence. Gold strengthened to $3,430 per ounce, underscoring defensive positioning.

Yield Curve Steepens as Political Pressure on Fed Rattles Bonds

Traders repriced expectations for rate policy after Trump’s move. Short-term yields slipped on speculation that September could still bring a cut, while long-term yields advanced, steepening the curve. The 30-year yield rose to 4.91%, reflecting skepticism that a politically reshaped Fed could keep inflation in check. Fed-funds futures now price a 66% chance that policy rates will fall to 3% or lower by September 2026, down from today’s 4.25–4.5% range. Investors also noted that if Jerome Powell steps down when his term ends in May, Trump could tilt the Fed decisively dovish, with four to five loyal appointees.

Nvidia Earnings Loom With $260B Swing at Stake

Focus is now squarely on NVIDIA Corp. (NVDA $181.31, +0.82%), whose quarterly earnings are due Wednesday after the close. Options markets imply a 6% post-report move, translating into a potential $260 billion market-cap swing. Analysts expect Q2 revenue of $46.2 billion and EPS of $1.01, up 53% and 49% year-over-year. However, those gains mark a sharp slowdown from the triple-digit growth of 2024. Restrictions on China sales could cut $8 billion from annual revenue despite Trump revoking a broader export ban. NVDA holds an 8% weight in the S&P 500, meaning its guidance could determine whether the index sustains its summer rally or retreats.

AMD Gains Momentum With IBM Partnership and Hyperscaler Demand

Advanced Micro Devices (AMD $165.63, +1.39%) surged after announcing a quantum computing collaboration with IBM (IBM) and receiving a Buy upgrade from Truist, which raised its price target to $213. The bank cited a shift in hyperscaler sentiment: AMD’s GPUs are no longer just a bargaining tool against Nvidia but are being adopted for large-scale deployments. Shares have already advanced 56% in the past six months, far outpacing the S&P 500’s 8% gain. This echoes AMD’s earlier success in CPUs against Intel, suggesting it may replicate the strategy in AI chips versus NVDA.

Small Caps Outperform as Russell 2000 Extends Rebound

The Russell 2000 (RUT 2,354, +0.65%) outperformed Tuesday, fueled by easing front-end yields. The index has gained 4% over the past month, rebounding from years of underperformance. Yet its failure to log record highs since 2021 underscores how the AI-driven rally has concentrated in megacaps. Analysts warn that while Powell’s Jackson Hole hint at September cuts boosts small-cap appeal, the benefits could fade if tariffs and inflationary pressures erode margins for smaller firms.

Defense Stocks Lifted as Trump Administration Considers Equity Stakes

Commerce Secretary Howard Lutnick revealed the Pentagon is evaluating taking equity stakes in major contractors. Lockheed Martin (LMT $455.14, +1.66%), Northrop Grumman (NOC flat), and RTX (RTX +0.4%) all traded higher on speculation. Lutnick called Lockheed “basically an arm of the U.S. government,” with 97% of revenues tied to federal contracts. Trump has already executed a precedent by directing a 9.9% Treasury stake in Intel (INTC) earlier this year, signaling that aerospace and defense could be next in line for partial state backing.

Mega Deals Drive EchoStar and AT&T Rally

One of the day’s biggest movers was EchoStar Corp. (SATS $52.87, +77%), soaring after AT&T (T) agreed to acquire spectrum licenses for $23 billion. The assets cover more than 400 U.S. markets, strengthening AT&T’s low- and mid-band spectrum holdings and enhancing its 5G capacity. The deal, expected to close mid-2026, marks one of the largest telecom spectrum transactions in years. AT&T shares rose modestly, while SATS surged nearly 77%, its sharpest single-day gain on record.

Eli Lilly Extends Rally on Weight-Loss Pill Success

Eli Lilly (LLY $724.69, +4.22%) advanced after its oral obesity treatment orforglipron cleared another Phase III trial. Patients on the high-dose regimen lost 10.5% of body weight at 72 weeks, far outperforming the 2.2% placebo group. The results position Lilly to challenge Novo Nordisk (NVO) in the lucrative obesity market, which Wall Street projects could exceed $100 billion annually. With LLY up over 50% YTD, its valuation has expanded aggressively, but clinical momentum keeps bulls firmly in control.

Consumer Confidence Holds Despite Political Noise

The Conference Board’s index registered 97.4 in August, down from 98.7 in July but ahead of the 96.5 forecast. Consumers remain concerned about the labor market, with 20% saying jobs are hard to get, though spending resilience has supported earnings at retailers like Walmart (WMT) and Target (TGT). Durable goods orders also came in stronger than feared, falling 2.8% in July versus the 4.1% expected. Ex-transportation, orders rose 1.1%, signaling manufacturing demand pockets remain intact despite tariff risks.

Interactive Brokers Joins the S&P 500 as Walgreens Exits

Interactive Brokers (IBKR $62.66, -0.16%) is set to join the S&P 500 on August 28, replacing Walgreens Boots Alliance (WBA). Shares jumped more than 4% in after-hours trade following the announcement. Inclusion in the benchmark will trigger forced buying from index funds and ETFs, a supportive tailwind as IBKR competes with Robinhood (HOOD) in low-cost brokerage. By contrast, Robinhood slipped 0.4% after being passed over.

Global Markets Show Strain From Tariff Threats

Overseas, equities faced heavier selling. France’s CAC 40 fell 1.7% to 7,709, weighed by political turmoil ahead of a September confidence vote on budget reforms. In Asia, Hong Kong’s Hang Seng dropped 1.2% to 25,524, while Japan’s Nikkei slid 0.97% to 42,394. Trump’s threat of “200% tariffs” on rare-earth exports from China and levies on countries imposing digital taxes rattled investor sentiment, amplifying volatility in global tech supply chains. Meanwhile, WTI crude (CL=F $63.41, -2.15%) and Brent (BZ=F) both retreated over 1%, reflecting concern over slowing demand as tariffs escalate.

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