US stocks end higher despite Trump’s Fed feud

ISTANBUL

US stocks ended higher Tuesday, despite escalating tensions between President Donald Trump and the Federal Reserve.

The Dow Jones Industrial Average rose 0.3%, or 135.60 points, to close at 45,418.07.

The Nasdaq climbed 0.44%, or 94.98 points, to close at 21,544.27. The S&P 500 added 0.41%, or 26.62 points, to 6,465.94.

The Volatility Index (VIX), also known as the “fear index," dropped 1.15% to 14.62.

In a letter Monday to Federal Reserve Governor Lisa Cook, Trump cited the powers granted to him by the Federal Reserve Act, stating: “You are hereby removed from your position on the Board of Governors of the Federal Reserve, effective immediately.”

He claimed there were sufficient grounds to believe Cook may have made false statements in one or more mortgage contracts.

Abbe David Lowell, Cook's attorney, said “President Trump has no authority to remove Federal Reserve Governor Lisa Cook.

"His attempt to fire her, based solely on a referral letter, lacks any factual or legal basis."

Cook also said via her attorney that Trump purported to fire her “for cause” when no cause exists under the law, and he has no authority to take the action.

"I will not resign. I will continue to carry out my duties to help the American economy as I have been doing since 2022," she added.

Trump also told reporters after Tuesday's Cabinet meeting that they would gain a majority on the Fed's board very soon.

Analysts noted that his decision reinforced concerns about the Fed's independence, adding that the development could be seen by investors as the first intervention in the ongoing policy dispute between the administration and the central bank.

On the macroeconomic data front, durable goods orders in the US fell less than expected in July, by 2.8% on month.

The S&P CoreLogic Case-Shiller National Home Price Index also rose 1.9% year-on-year in June, showing that the slowdown in home price growth is continuing.