August 26, 2025

Markets:

U.S. stock futures slipped Tuesday, extending Monday’s losses, after President Donald Trump took the unprecedented step of removing Federal Reserve Governor Lisa Cook from the central bank’s board.

The move jolted rates markets. Long-term Treasury yields climbed, while short-term yields fell, steepening the curve as investors weighed the risk of a politicized Fed: easier policy in the near term but diminished inflation vigilance down the road. The dollar index dipped 0.3%.

By law, Fed governors can only be removed “for cause,” making Trump’s decision likely to face legal challenge. The board currently has six members, with one vacancy after Adriana Kugler’s resignation earlier this month. Removing Cook would cut the number to five, though non-Trump appointees would still hold a majority. If Stephen Miran is confirmed to Kugler’s seat and Cook is successfully ousted, Trump could gain a 4–3 advantage.

Markets continue to look toward Powell’s dovish hints at Jackson Hole and the prospect of a September rate cut. Attention also turns to Nvidia’s earnings on Wednesday, a potential spark for megacap tech after last week’s pullback. The “Magnificent Seven” caught a bid Friday but only after five straight losing sessions.

Portfolio:

Today we’re positioned in ONDS, NIO, and ZMDTF.  Expect plenty of swings as we head into Nvidia’s report tomorrow. As noted last week, algos remain firmly in control with volume drying up into the end of summer—a historically light stretch. Activity should pick back up after Labor Day. Patience is key here.

SPY was muted yesterday, closing with weakness at the very end of the day. Support near 642 needs to hold; otherwise, a 640 test is in play. In the bigger picture, this is constructive—the 50% retrace of the last leg higher is actually bullish, despite the headlines fueling bearish sentiment. That “pain trade” dynamic is still pointing upward.

Several names printed strong inside days yesterday, while others are beginning to break out. With low volume and plenty of newsflow, today’s price and flow action should be especially interesting. Stay ready.