Investing.com - U.S. stock futures tick higher following declines in the prior session, as fears swirled around a possible encroachment by President Donald Trump on the longstanding independence of the Federal Reserve. Tesla (NASDAQ:TSLA) is expected to report its latest quarterly earnings after the closing bell on Wall Street, with CEO Elon Musk likely to face questions from investors over the group’s plans to battle intense competition and address a backlash from his close ties to Trump. Meanwhile, gold extends a recent surge, temporarily topping the $3,500 level.
1. Futures higher
U.S. stock futures pointed higher after equities sank in the prior session on concerns that the Trump administration may be considering moves that could threaten the independence of the Fed.
By 03:46 ET (07:46 GMT), the Dow futures contract had gained 313 points, or 0.8%, S&P 500 futures had jumped by 48 points, or 0.9%, and Nasdaq 100 futures had increased by 178 points, or 1.0%.
The main averages all fell by more than 2% on Monday, as investors assessed remarks from the White House which seemed to suggest that officials were mulling possibly ousting Fed Chair Jerome Powell. Trump has also hit out at Powell, calling him a "major loser" and "Mr. Too Late" and arguing that he has not moved fast enough to slash interest rates to support the broader economy.
The Wall Street Journal has reported that Trump may be laying the groundwork to blame Powell for any economic weakness resulting from the president’s tariff policies.
Concerns have risen that should Trump fire Powell, jitters in financial markets -- which have already been shaken by Trump’s levies -- will intensify. However, Paul Ashworth, Chief North America Economist at Capital Economics, predicted that the initial market reaction to a Powell dismissal "might not be disastrous, as long as Trump quickly lines up a relatively-qualified replacement."
Ashworth added that firing Powell would only be "the first step" by Trump to dismantle the independence of the Fed.
"If Trump is set on lowering interest rates then he will have to fire the other six Fed Board Members too, which would trigger a more severe market backlash, with the dollar falling and rates at the long end of the yield curve rising," Ashworth said.
2. Tesla earnings after the bell
Tesla is scheduled to report its latest earnings after the closing bell on Wall Street on Tuesday, with expectations for the electric carmaker relatively muted as it grapples with tepid demand and a backlash to CEO Elon Musk’s political activities.
Sales at Tesla have slumped as the firm deals with increased competition and controversy over Musk’s close proximity to Trump. Musk has helmed the so-called Department of Government Efficiency, or DOGE, which has been tasked by the White House with helping cut the size of the federal government.
Against this backdrop, investors will likely be keen for Musk to provide more details on the roll-out of a more affordable vehicle launch and plans for Tesla’s much-hyped robotaxi business.
"Tesla expectations are very low, and Musk will probably provide his usual barrage of bullish commentary on the call (he may also drop hints about when his time on DOGE will come to an end), but the company’s substantial headwinds aren’t going away anytime soon," analysts at Vital Knowledge said in a note to clients.
3. 3M among results deluge
Elsewhere on a busy earnings slate, results are due out before the start of U.S. trading from consumer goods conglomerate 3M Company (NYSE:MMM).
The Scotch Tape-maker is set to be one of the first major industrial names to report its latest quarterly figures, and analysts will likely be on the lookout from any commentary around the possible impact of Trump’s tariffs.
Residential homebuilder PulteGroup (NYSE:PHM) could also provide some insight into the state of the American property sector. Rival D.R. Horton lowered its full-year guidance last week, flagging that housing activity is slow and the spring season has begun on a weaker-than-anticipated note.
Among a host of other earnings today, GE Aerospace, Verizon Communications (NYSE:VZ), RTX, Danaher (NYSE:DHR), and Lockheed Martin (NYSE:LMT) are all expected to unveil returns.
4. Fed speakers ahead
At least five Fed policymakers are on the docket to speak today, and investors will be on the hunt for any commentary around the relationship between the central bank and the Trump administration.
Fed Vice Chair Philip Jefferson and Governor Adriana Kugler will deliver remarks in Philadephia and Minneapolis, respectively, while speeches from Fed members Thomas Barkin, Neel Kashkari and Patrick Harker are also on the diary.
The comments will come ahead of the Fed’s next interest rate decision on May 7.
Last week, Powell said that Trump’s tariffs have so far been larger than expected and could translate into higher inflation and slower economic growth. He added that the Fed will try to get a greater sense of clarity around the effect of the duties before mulling changes to borrowing costs.
5. Gold hits $3,500 level
Gold prices surged to touch a new record high on Tuesday, buoyed by sustained safe-haven appeal over elevated U.S.-China trade tensions, and concerns around Trump’s possible push to overhaul the Federal Reserve.
As of 03:47 ET, spot gold had jumped 1.4% to $3,471.70 per ounce, while gold futures expiring in June had risen by 1.7% to $3,483.24 an ounce.
Gold soared by more than 3% on Monday and has hit consecutive record highs in the previous three sessions, driven largely by escalating geopolitical risks, strong central bank demand, and persistent inflation fears.