Market Reacts to Trump's Federal Reserve Shake-up

U.S. stock index futures declined on Tuesday, weighed down by an increase in longer-dated Treasury bond yields. This shift followed President Donald Trump's controversial decision to dismiss a Federal Reserve governor, sparking concerns about the central bank's independence and future monetary policy.

Investors are keenly awaiting Nvidia's earnings and a pivotal inflation report later this week, seeking more clarity on artificial intelligence advancements and potential interest rate cuts, which have been driving recent market gains. The chip giant's shares showed a slight uptick in premarket activity.

Trump's unprecedented move to remove Governor Lisa Cook, citing mortgage loan improprieties, has unsettled investors regarding its implications for monetary policy, just weeks ahead of the Federal Reserve meeting. Although Trump's action faces potential legal hurdles, its success could allow him to appoint a new board member, aligning with his calls for lower interest rates.

(With inputs from agencies.)