Markets hold as Fed’s Cook vows to sue challenging Trump dismissal

Good morning. Here's what happened overnight and what you need to know today.

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1.

You’re fired: The US dollar fell, longer-dated Treasury yields rose but equity markets remained little changed on Tuesday after Trump moved to sack Federal Reserve governor Lisa Cook for cause, despite renewed concerns about the independence of the US central bank. Late on Monday Trump announced he would remove Cook over alleged mortgage fraud, prompting unease among investors about any potential impact the firing could have on the Fed’s September meeting. If successful, Trump would be able to nominate a new member of the Fed board, giving him a 4-3 majority. Stock indexes dipped before paring that back to close little changed on the upside. Meanwhile, Cook said “no cause exists under the law” for Trump to fire her, vowing to fight the president’s move. “His attempt to fire her, based solely on a referral letter, lacks any factual or legal basis. We will be filing a lawsuit challenging this illegal action,” Cook’s lawyer, Abbe Lowell, said in a statement. (Capital Brief)(Trump Truth Social)(ABC News)(FT)(Reuters)(WSJ)(Bloomberg)

2.

L(AI)ssez faire: Google and Microsoft are urging Australia to loosen its copyright laws in the clearest sign yet of how powerful artificial intelligence platforms will fight over the contentious issue. Submissions to the Productivity Commission’s review of the digital economy in the lead up to Labor’s economic roundtable, both lodged in June, confirm the two tech giants want Australia to weaken copyright laws and give AI platforms text and data mining exemptions. In its submission, Google warned AI companies may divert major resources from Australia to other markets in the Asia-Pacific if the government does not relax copyright laws to make it easier for them to train their models. It said regulatory uncertainty in Australia over copyright, tax and other laws could see businesses “operating at the cutting edge of AI” hesitate to commit significant resources to the country. (Capital Brief)

3.

Defence stakes: US Commerce Secretary Howard Lutnick said the Trump administration is considering stakes in defence contractors including Lockheed Martin, Boeing and Palantir. “There’s a monstrous discussion about defence,” he told CNBC, citing Pentagon leaders and saying Lockheed earns 73–97% of its revenue from the US government and is “basically an arm of the US government”. He said the key question is whether the US is adding “fundamental value” to a business. His comments followed the administration’s near-10% stake in Intel in exchange for a USD8.9 billion investment funded through CHIPS Act grants. Shares in major defence companies rose. Lockheed said it is continuing its strong working relationship with Trump’s administration, while Boeing and Palantir have not commented. (Reuters)(Bloomberg)(Politico)

4.

Betr bid: Online bookmaker Betr submitted a revised bid for PointsBet on Tuesday evening, less than a day after rejecting rival takeover suitor MIXI’s proposal to increase its all-cash off-market takeover offer for the company. Betr said it would upgrade its offer from 4.219 Betr shares per PointsBet share it does not already own to 4.375 Betr shares. The increased offer amounts to $1.40 per PointsBet share based on Betr’s recent $130 million capital raise price of $0.32. Betr also said it will increase its selective buy-back pool from at least $80 million to at least $90 million (subject to approval at its upcoming AGM). Betr said its bid is superior to MIXI’s “best and final” offer of $1.25 cash per PointsBet share, conditional on taking a 90% stake in the company which would have triggered a compulsory takeover. This would mean buying out the 19.6% stake Betr already holds in PointsBet. (ASX)(Capital Brief)

5.

Tech bite: Donald Trump Jr became an adviser to crypto-based prediction market Polymarket, while his firm 1789 Capital also invested in the company. The terms were undisclosed, but financial media reported sources put the deal in the double-digit millions. Axios said 1789 waited to invest until Polymarket acquired a CFTC licence through its USD112 million purchase of exchange QCEX and after DOJ and CFTC probes were closed. Polymarket said it handled USD6 billion in trades in the first half of the year. Meanwhile, in Germany, a court ruled Apple cannot market its Watch as a “CO2-neutral product,” saying the claim misled consumers. Apple said it will phase out the label to comply with EU rules from 2026. And the tech giant said it will hold its fall launch on 9 September, expected to unveil the iPhone 17 lineup and other devices. (Polymarket)(Axios)(Reuters)

6.

Kick probe: Paris prosecutors launched an investigation into Australian-owned video platform Kick after the online death of Frenchman Raphael Graven, who endured days of livestreamed abuse. Reuters reports the probe will examine whether Kick knowingly provided illegal services by broadcasting deliberate attacks and whether it complied with European digital rules requiring platforms to report risks to life or safety. A June 2025 law makes it a criminal offence to provide an illicit online platform, with penalties of up to 10 years’ jail and a €1 million ($1.8 million) fine when committed by an organised gang, prosecutors said. Separately, Nice prosecutors opened an inquiry into the 46-year-old’s death in the village of Contes, where an autopsy found no impact trauma and pointed to probable medical or toxicological causes. Kick said it would cooperate with authorities. The French digital communication regulator Arcom has also launched a probe, and the government has said it would tighten regulations if necessary. (Reuters)

7.

Presidential SPAC: Trump Media & Technology Group (TMTG) and Crypto.com are planning to launch a treasury-style strategy to accrue Crypto.com's native token, Cronos (CRO), deepening US President Donald Trump’s ties to the crypto industry. TMTG said that the new company, Trump Media Group CRO Strategy, will go public via a special purpose acquisition company (SPAC), Yorkville Acquisition Corp. Funding for the SPAC is expected to consist of USD1 billion ($1.5 billion) in CRO tokens (representing 19% of the total CRO market cap), USD200 million in cash, USD220 million in warrants and a $5 billion equity line of credit from an affiliate of Yorkville. The statement says it expects the combination to be the first and largest publicly traded CRO treasury company and the largest digital asset treasury company to market cap ratio in history. The CRO crypto token rose 22.6% to USD0.19 on the announcement, while Trump Media's shares jumped 6.6% to USD18.36. (TMTG)(Bloomberg)(Reuters)(Capital Brief)

8.

Handover credit: Mineral Resources is set to take control of Resource Development Group, a collapsed garnet miner previously led by Andrew Ellison, brother of MinRes managing director Chris Ellison, after cutting off its credit in July. Administrators McGrathNicol have recommended creditors support a MinRes proposal to acquire RDG’s shares and assets, cancel more than $161 million in loans and credit facilities, and pay all employee and non-related party creditor claims. In a report to creditors, McGrathNicol found no evidence of wrongdoing but cited insufficient due diligence on RDG’s projects. It said the company had become wholly reliant on MinRes to maintain solvency, burning through almost all of a $135 million loan by December while remaining cash-flow negative. Andrew Ellison was made redundant on 4 August and will receive $2000 as an excluded creditor. Creditors will vote on the proposal on 1 September. (Capital Brief)(McGrathNicol)(The Australian)(AFR)