Nasdaq Composite extends weakness as Trump shocks markets with Fed shakeup
The Nasdaq Composite Index is facing renewed pressure as announcement from U.S. President Donald Trump rattled financial markets.
Trump posted through Truth Social that Federal Reserve Governor Lisa Cook had been removed from her role, an unprecedented move that has sparked concerns over the independence of the central bank. Markets quickly reacted, and Nasdaq futures fell 0.2% in early Tuesday premarket trading. The decline builds on Monday’s 0.22% loss when the index failed to hold above last week’s closing levels.
Highlights
-21,550 resistance caps Nasdaq recovery attempts as investor trust weakens
-Nasdaq falls toward 21,400 support as Trump fires Fed governor.
-Nasdaq RSI shows bullish bias but Fed concern threaten broader sentiment.
Although Monday’s session began with strength, but the rally faltered at the resistance level of 21,550. Sellers quickly stepped in, driving the index lower to a session low of 21,450 before settling weaker on the day.
Nasdaq price dynamic (June - August 2025). Source: Tradingview
The firing of a sitting Fed governor is seen as highly disruptive, not only because of its rarity but also because of its implications for monetary policy independence. Analysts warn that such moves could undermine investor trust in one of the key institutions supporting U.S. economic stability. The bond market reflected this shift in sentiment, as long-term Treasuries declined while short-term debt rose.
Nasdaq RSI stays bullish, but sentiment risks a shift to bearish territory
From a technical standpoint, the Nasdaq Composite has extended lower toward the 21,400 region, where the 20 exponential moving average on the four-hour chart is providing near-term support. If this support level holds, dip buying may step in. At the same time, the index continues to struggle at the 21,550 resistance level, which now acts as the main ceiling for any recovery attempts.
Momentum indicators show that the 4-hour RSI has been declining but remains in bullish territory, which means the upward trend is not yet broken. However, sustained pressure on investor sentiment over Fed independence could drag momentum into bearish territory if selling accelerates. For now, the 21,550 resistance above and the 20 EMA support at 21,400 below define the short-term pivot range. A decisive move beyond either of these levels will likely determine whether the Nasdaq Composite resumes its broader uptrend or extends into a deeper correction.
Nasdaq dropped after the ISM Services Index missed expectations and raised fresh stagflation concerns. The index stalled at 21,060 as RSI signalled more sideways movement.
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