Stocks Little Changed After Trump’s Fed Salvo

U.S. stocks were flat Tuesday as Wall Street looked beyond President Donald Trump’s removal of Federal Reserve Governor Lisa Cook from the central bank’s board and awaited quarterly figures from chip giant Nvidia The Dow Jones Industrials regained 2.04 points to open Tuesday at 45,284.51. The S&P 500 poked 4.41 points to 6,443.73. The NASDAQ moved up 26.09 points to 21,475.38. Long-term Treasury yields rose after the Trump move, while short-term yields declined as investors steepened the yield curve on the notion rates may go lower in the short-term, but eventually go higher as a politicized Fed becomes less attentive to inflation. The U.S. dollar index, which measures the greenback against a basket of major currencies, was last down 0.2%. Trump’s unprecedented move adds to the pressure the president has been putting on the central bank’s independence. By law, a president may only remove Fed governor “for cause.” As a result, it is possible the matter will be challenged in the courts. There are currently six members on the Fed’s board, with one seat vacant after the resignation of Adriana Kugler earlier this month. Removing Cook would leave five members, with non-Trump appointees still holding a majority. However, if Stephen Miran is cleared for the Kugler vacancy and the president is successful in removing Cook, it would give Trump a 4-3 majority. If Fed Chair Jerome Powell leaves his seat voluntarily after his term expires in May, it would give the president a fifth vote. Prices for 10-year Treasury lost ground Tuesday, raising yields to 4.29% from Monday’s 4.28%. Treasury prices and yields move in opposite directions. Oil prices docked 77 cents to $64.03 U.S. a barrel. Gold prices hiked $2.50 at $3,420 U.S. an ounce.