Evening digest: investors navigate Trump-Fed tensions, telecom deals, and political uncertainty

Political and corporate developments stirred caution among investors across the globe as investors closely track multiple developments.

Tensions around the Federal Reserve, major telecom deals, and potential government stakes in key industries weighed on sentiment, while European markets faced pressure amid political uncertainty in France.

A glance at the biggest stories capturing attention today.

Trump-Fed tensions rattle investors

Wall Street is showing caution on Tuesday as President Trump intensified his conflict with the Federal Reserve. 

Donald Trump ordered the removal of Fed Governor Lisa Cook from office, which raised concerns about the central bank’s independence. 

The investors have raised concerns about political interference impacting the Fed’s ability to manage inflation and employment, which can further weaken confidence in US monetary policy.

At the same time, markets expect the Fed to cut interest rates at its next meeting, offering some optimism. 

Still, the bond market and the dollar have shown signs of unease in response to the political pressure. Overall, investors remain cautious as they navigate a fragile outlook amid these uncertainties.

EchoStar shares surge after AT&T purchase

AT&T said it will acquire some wireless spectrum licenses from EchoStar for about $23 billion in cash. The goal is to expand AT&T’s 5G network as carriers compete for spectrum to meet growing demand for faster mobile services.

The news had a big impact on the markets. EchoStar’s shares jumped more than 80% to $53.58, the highest since January 2018, as investors welcomed the cash and the value of its spectrum.

AT&T’s stock also rose slightly, up 0.4%, as investors looked at what the deal could mean for its 5G network and future growth.

The deal shows how important spectrum has become in the US telecom industry, where owning it is key to staying competitive in 5G. Read full report here.

From Intel to Lockheed: Washington goes shopping

The Trump administration is thinking about buying stakes in major US defense companies, according to Commerce Secretary Howard Lutnick. 

In an interview to CNBC, Lutnick said Pentagon leaders are discussing the possibility of the government taking ownership in contractors like Lockheed Martin and Boeing.

He noted that Lockheed Martin gets about 97% of its revenue from the US government, making it closely tied to federal operations.

This comes after the administration recently bought nearly a 10% stake in Intel and intervened in other key US industries. 

The goal is to protect important American businesses and ensure steady funding for defense and munitions production. 

Some critics worry that the government’s growing role in private companies could be restrictive, but the administration says it helps safeguard national interests and maintain technological leadership. 

After the announcement, defense stocks saw modest gains. Read full report here.

French markets slide amid political crisis

French markets dropped sharply on Tuesday as Prime Minister François Bayrou’s minority government faces trouble. 

He has called a confidence vote on September 8 to pass a €44 billion deficit-cutting plan, but major parties say they will vote against it.

The uncertainty caused the CAC 40 index to fall nearly 2%, and banks like BNP Paribas and Société Générale lost billions in value. 

Government bond yields also went up to their highest levels since March, showing concern over France’s fiscal situation.

The economy is already weak, with growth expected to be around 0.8% this year. Analysts warn that if the government falls, it could make the debt situation worse, increase borrowing costs, and cause political instability similar to last year. 

The confidence vote will be critical for both France’s economy and politics.