U.S. stocks rose on Aug. 26 as investors looked past President Donald Trump’s firing of Federal Reserve Governor Lisa Cook and its implications for the central bank’s independence.
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The benchmark S&P 500 gained 0.41% on the day to close at 6,465.94, while the tech-heavy Nasdaq also rose 0.4% to end the trading session at 21,544.27. The blue-chip Dow Jones Industrial Average inched up 0.3% to finish at 45,418.07.
At the same time, long-dated U.S. Treasury yields rose after Trump’s action against Fed Governor Cook, while short-term yields declined as investors steepened the yield curve on the notion that rates may go lower in coming months. The U.S. dollar ended the day down 0.3%.
Fed Fallout
Lisa Cook plans to file a lawsuit challenging her removal from the U.S. Federal Reserve by the president, while the central bank itself issued a statement saying it “will abide by any court decision” on the matter. Economists expressed dismay at President Trump’s unprecedented move, saying it threatens the future independence and direction of the central bank.
Separately, market anticipation is high for chipmaker Nvidia’s (NVDA) earnings report scheduled for after markets close on Aug. 27. NVDA stock rose 1.09% on Aug. 26 to close at $181.77 per share, near an all-time high on a split-adjusted basis.
Is the SPDR S&P 500 ETF Trust a Buy?
The SPDR S&P 500 exchange-traded fund (SPY) currently has a consensus Moderate Buy rating among 504 Wall Street analysts. That rating is based on 419 Buy, 79 Hold, and six Sell recommendations issued in the last three months. The average SPY price target of $716.75 implies 11.49% upside from current levels.
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