Nasdaq 100 and S&P500: Fed Shake-Up Hits Real Estate Sector, Eli Lilly Surges, Nvidia Next Up

Stocks Mixed Midday as Fed Concerns Resurface After Trump Removes Governor

 

Wall Street traded mixed by midday Tuesday, as political drama surrounding the Federal Reserve pulled focus from upcoming economic data and earnings. The Dow hovered near flat, while the S&P 500 added 0.14% and the Nasdaq gained 0.28%. Treasury yields moved higher, putting pressure on rate-sensitive sectors, following President Trump’s surprise decision to oust Fed Governor Lisa Cook.

The move, tied to alleged mortgage loan improprieties, stoked fresh concerns over the central bank’s independence. If upheld, the removal would give Trump an opportunity to influence Fed policy ahead of a closely watched meeting. The development comes as traders already expect a 25-basis-point rate cut in September, fueled by dovish commentary from Chair Powell and signs of labor market cooling.

How Are Fed Worries and Rising Yields Pressuring the Market?

Rising bond yields weighed on real estate and consumer-focused sectors. The Real Estate Select Sector dropped 0.59%, while Consumer Staples fell 0.72%. Utilities also edged lower. U.S. 10-year and 30-year Treasury prices declined, sending yields up, while the dollar weakened against major peers.

Financials and Industrials bucked the trend with slight gains. Materials and Energy were mixed, with Energy slipping 0.94% despite a bounce in crude prices earlier in the session.

Will Nvidia’s Earnings Deliver a Catalyst for AI Stocks?

Traders are looking ahead to Nvidia’s earnings after the close Wednesday, with expectations running high given AI’s central role in recent market strength. Nvidia shares slipped slightly midday. A disappointment could trigger a selloff in high-multiple tech names, with the S&P 500 currently trading well above long-term valuation averages.

Advanced Micro Devices rose 1.6% after an analyst upgrade, while Palantir and Monolithic Power added over 2%, keeping momentum alive in AI-adjacent chipmakers.

Which Stocks Are Moving on News and Data?

Eli Lilly rose 4.2% after announcing that its experimental diabetes drug led to a 10.5% weight reduction in trial patients. EchoStar surged 76% after AT&T agreed to purchase spectrum licenses for $23 billion. Meanwhile, Keurig Dr Pepper and Constellation Brands fell over 4%, weighing on Consumer Staples.

Capital goods orders posted a surprise upside for July, helping Industrials gain traction. Richmond Fed President Thomas Barkin is also slated to speak, offering potential clues on rate policy.

What Should Traders Watch in the Second Half?

With Fed credibility now in the spotlight, traders should closely monitor incoming inflation and labor market data later this week.

Nvidia’s report remains the biggest near-term catalyst.

Until then, market direction will likely hinge on bond yield moves and investor reaction to Trump’s Fed intervention. Volatility could pick up if policy expectations get recalibrated.

More Information in our Economic Calendar.