TL;DR

Trump fires Fed Governor; Fed rate cut odds rise; U.S. escalates global tariff threats.

Highlights

• Trump fires Fed Governor Lisa Cook, triggering legal battle over Fed independence; dollar falls, yields steepen, and U.S. equity futures slip as traders price in higher odds of a September rate cut1.
• Trump threatens new tariffs and chip export curbs on countries with digital services taxes targeting U.S. tech firms2.
• U.S. doubles tariffs on Indian goods to 50% over Russian oil purchases; Indian equities and rupee drop3.
• China sends top trade negotiator to Washington as U.S.–China talks resume, focusing on tariff rollbacks and rare-earth supply4.
• Morgan Stanley and Credit Agricole now forecast Fed rate cuts starting September 2025, citing labor-market and inflation risks from tariffs5.
• French equities and bonds drop as PM Bayrou calls a confidence vote, raising risk of government instability and budget uncertainty6.
• Japan’s Akazawa heads to Washington to finalize $550B investment accord, seeking tariff relief and expanded U.S.–Japan industrial cooperation7.
• U.S. and Russia discuss energy deals as part of Ukraine cease-fire talks, including potential easing of some sanctions8.
• AT&T to acquire $23B in wireless spectrum from EchoStar , expanding 5G reach; EchoStar shares surge, AT&T up pre-market9.
• Eli Lilly ’s oral obesity pill meets Phase 3 goals; global filings planned, shares up in early trading10.
• Ethereum spot ETFs attract $444M in inflows, outpacing Bitcoin ; major whale rotates $2.6B from Bitcoin to Ether1516.
• IBM and AMD announce partnership to develop quantum-centric supercomputers for advanced AI and scientific workloads18.

Commentary

Markets are opening with heightened policy risk after President Trump’s firing of Fed Governor Lisa Cook, a move that has immediate implications for the Fed’s independence and rate outlook1. The dollar weakened and yields steepened as traders moved to price in a higher probability of a September rate cut, a shift echoed by Morgan Stanley’s and Credit Agricole’s updated forecasts15. The legal standoff over Cook’s removal could inject further volatility into rates and currency markets, with Fed credibility now under scrutiny1.

Trade policy remains a major driver. Trump’s threats of new tariffs and chip export controls against countries imposing digital taxes on U.S. tech firms2, combined with the doubling of tariffs on Indian goods3, signal a more aggressive U.S. trade stance. These measures are already pressuring Indian assets and could weigh on global supply chains, tech, and industrials3. Meanwhile, China’s dispatch of its top trade negotiator to Washington for renewed talks offers a tentative sign of stabilization4, but the overall environment remains tense.

European risk is also in focus, with French equities and bonds under pressure as PM Bayrou’s confidence vote raises the prospect of government instability and fiscal uncertainty6. This weighs on risk sentiment and could spill over into broader European assets6.

On the corporate side, AT&T ’s $23B spectrum acquisition and Eli Lilly ’s positive obesity drug results are notable sector catalysts, both lifting shares pre-market910. In crypto, Ethereum spot ETFs are seeing strong inflows and a large Bitcoin -to-Ether rotation is fueling volatility1516. IBM and AMD ’s quantum computing partnership highlights continued investment in advanced tech infrastructure18.

Traders should monitor U.S. rates, the dollar, and equity volatility as Fed governance and trade headlines drive sentiment. Sector focus: tech and industrials for tariff exposure, healthcare for drug news, and crypto for ongoing capital rotation.