US stocks climbed, supported by optimism over interest rate cuts and strong corporate results, despite political uncertainty surrounding the Federal Reserve. Notable gains from NVIDIA and Eli Lilly helped lift the market.

Wall Street

US stocks recovered following a brief decline, buoyed by expectations of interest rate cuts, a stable economic outlook, and anticipation of NVIDIA's financial results. The S&P 500 advanced by 0.4%, nearing its recent record high, with NVIDIA shares up 1% and Eli Lilly surging nearly 6% after positive trial results for a new weight loss pill.

Market sentiment was tempered by political developments, as President Trump attempted to dismiss Federal Reserve Governor Lisa Cook, who pledged to challenge the move in court. This raised questions about the Fed's independence and the future composition of its policymaking committee. The main market reaction included a drop in short-term Treasury yields and a slight increase in long-term yields, indicating expectations for future rate cuts while inflation concerns persist.

Stocks rise as rate-cut hopes and corporate gains offset Fed uncertainty

Stocks regained traction after a one-day slip as a combination of rate-cut hopes, a steady economy, and anticipation of NVIDIA results support the indexes, even in the face of an attempt by President Trump to fire Fed Governor Lisa Cook. The S&P 500 rose 0.4% on Tuesday, returning to the doorstep of its recent closing record high, powered by a 1% gain in NVIDIA shares and a near 6% boost to Eli Lilly after a successful trial of a promising weight loss pill from that company. Fed Governor Lisa Cook vowed to fight the attempt to remove her in court as illegitimate, raising uncertainty about the makeup of the Fed Policymaking Committee and the broader independence of the Federal Reserve. The main notable market reaction was a drop in short-term Treasury yields and slight rise in very long-term yields, such as the 30-year. That's a so-called steepening of the yield curve that implies future cuts to short rates while inflation expectations remain somewhat elevated. So far, this is happening at a comfortable range when risks to the economy are seen as contained, though longer term, the cost of a politically swayed monetary policy error might not be so benign. With your CNBC Markets Now update, I'm Mike Santoli.

SpaceX on Tuesday launched its Super Heavy-Starship, the most powerful rocket in the world, for a test flight after three other flights failed earlier this year. NASA hired SpaceX to build a lunar lander version of Starship to carry astronauts to the moon.

Starbase

SpaceX launches Super Heavy-Starship in test flight

President Donald Trump said he would seek the death penalty for murders in Washington, as part of a crackdown on what he calls out-of-control crime in the US capital.

Washington

Trump endorses death penalty return in Washington D.C.

As the Israeli military gives an initial assessment of deadly strikes on a Gaza hospital, hundreds of thousands of protesters urged Prime Minister Benjamin Netanyahu to accept a ceasefire with Hamas in exchange for a hostage deal.

Tel Aviv-Yafo

Middle East Conflict

Protesters urge Netanyahu to reach hostage deal

Cracker Barrel says it will go back to its old logo after facing intense backlash and seeing its company value to sink by nearly $100 million after switching to a new design last week. In a statement, Cracker Barrel thanked their guests for sharing their voices.

Cracker Barrel scrapping new logo, returning to old one after backlash

The small West Tennessee town of Mason, just 2 square miles in size, is home to about 1,000 people. But its residents are now divided by what a new immigration detention facility will mean for the area.

Mason

Small Tennessee town divided over new ICE detention facility

A standoff is brewing between President Trump and economist Lisa Cook. Mr. Trump tried to fire her, claiming "there is sufficient cause" to believe that Cook made false statements on one or more mortgage agreements.

Trump clashes with Fed board member Lisa Cook, pushing to oust her

Protesters demanding an end to the Gaza war and the return of hostages to their homes took to the streets in Israel on Tuesday ahead of a security cabinet meeting scheduled for the evening.

Israeli protesters demand hostage deal as cabinet set to meet

Australia accused Iran on Tuesday (August 26) of executing two antisemitic arson attacks in the cities of Sydney and Melbourne and gave Tehran's ambassador seven days to leave the country, its first such expulsion since World War Two.

Council of the City of Sydney

Australia expels Iranian envoy over antisemitic attacks

President Donald Trump announced the removal of Federal Reserve Governor Lisa Cook, the only Black woman to serve on the board. Critics call it an attack on the Fed's independence, while Cook says no legal cause exists for her firing.

Trump says he fired Lisa Cook from Federal Reserve board

U.S. President Donald Trump signed an executive order creating new National Guard units, including a rapid-response force to handle what the administration calls civil disturbances.

White House authorizes creation of rapid-response National Guard units

Billionaire entrepreneur Elon Musk’s artificial intelligence startup xAI sued Apple and ChatGPT maker OpenAI in U.S. federal court in Texas, accusing them of illegally conspiring to thwart competition for artificial intelligence.

Texas

Rise of AI

Elon Musk's xAI sues Apple, OpenAI over competition claims

Strikes on the Nasser hospital in Gaza that left at least 20 people dead, including rescuers, journalists and health-care workers are being met with global outrage. The Israeli military is investigating what Israel Prime Minister Benjamin Netnayahu called a ‘tragic mishap.’

Israeli PM calls deadly strikes on Gaza hospital a ‘tragic mishap’

Kilmar Abrego Garcia is back in ICE custody and is facing deportation to Uganda, the Department of Homeland Security says, after he was released from criminal custody last week.

Baltimore

Abrego Garcia in ICE custody, court blocks immediate deportation

Ukrainian President Volodymyr Zelenskyy said he will meet with the U.S. and other countries this week to discuss a potential meeting with Russian President Vladimir Putin aimed at reaching a ceasefire.

Kyiv

Ukraine Invasion

Zelenskiy say he will meet with U.S., others on potential Putin talks

U.S. President Donald Trump says Chicago could be the next city to see National Guard deployment, sparking strong opposition from Mayor Brandon Johnson and Governor JB Pritzker, who argue crime is already falling and federal intervention is unnecessary.

Chicago

Trump threatens to send National Guard troops to Chicago

Four journalists working with Reuters, Al Jazeera and others were killed in explosions at a Gaza hospital. Gaza officials blame Israeli drone strikes, though CBS News has not independently verified the claims.

Jerusalem

Four journalists reported dead after Gaza hospital blasts

U.S. National Guard troops patrolling the streets of Washington D.C. as part of what President Donald Trump said was his crackdown on crime began carrying weapons on Sunday night, two officials said.

National Guard patrolling Washington DC begin carrying weapons

In a visit to Kyiv, Prime Minister Mark Carney affirmed Canada’s support for Ukraine and committed to sending soldiers if a ceasefire with Russia is reached.

Carney in Kyiv pledges support, possibly troops for Ukraine

The Pickett Fire is growing in California's Napa County, prompting new evacuations as it threatens homes and wineries. The flames, fueled by scorching temperatures and dry conditions, are being battled by hundreds of first responders.

Napa Valley

Evacuations ordered in California as heatwave fuels wildfire

Democrats are pushing back against President Trump's plan to send the National Guard to more cities, including Chicago, New York and Baltimore, as troops continue to patrol Washington, D.C. State and local leaders say they have crime under control.

Democrats slam Trump's plans to send National Guard to more cities

Beef prices are at record highs with the average price of a pound of ground beef topping $6. Lisa Rozner reports on what's causing prices to soar.

Why U.S beef prices are soaring

A defiant Ukraine marked its independence from the former Soviet Union Sunday amid more fighting with Russia. Chris Livesay reports on how world leaders joined in, voicing their support.

Ukraine marks its Independence Day as war with Russia continues

The boats are produced by unknown Turkish companies and are then sent disassembled in multiple shipments to avoid suspicion in what authorities say is for the sole purpose of trafficking migrants across the English Channel.

Sofia

Inflatable boats used for migrant trafficking seized

Less than 24 hours after he was released from jail, Kilmar Ábrego García was told that U.S. immigration officials plan to deport him to Uganda. The Salvadoran national, who has been living illegally in the U.S. since about 2011, was wrongly deported to his home country earlier this year.

Maryland

Kilmar Abrego Garcia told he may be sent to Uganda

Erik and Lyle Menendez remain behind bars, their hopes for release dashed by two separate parole boards more than three decades after murdering their parents. Elise Preston reports.

Los Angeles

Erik and Lyle Menendez denied parole

Tourism in Las Vegas is slumping this summer, costing the city billions. That could signal trouble ahead for the U.S. economy. Andres Gutierrez has new details.

Las Vegas

Las Vegas tourism slumps this summer, signaling trouble for U.S. economy

Texas Republicans took a victory lap after an early morning vote Saturday that sought to give their party an edge during the 2026 midterms. Democrats in Texas plan to challenge the legality of the new congressional map, saying it dilutes the power of minorities.

Austin

Texas Republicans take victory lap after redistricting vote

Israel has called the United Nations' declaration of famine in parts of Gaza an "outright lie," but multiple U.N. bodies, more than 100 humanitarian groups, and several of Israel's own allies have warned for months that the war is causing starvation among civilians.

Israel denies U.N.'s declaration of famine in parts of Gaza

U.S. President Donald Trump says he will impose sanctions on Russia if it fails to reach a peace deal in Ukraine within two weeks. But Ukrainian President Volodymyr Zelenskyy says Russia’s ongoing attacks on his country show that President Vladimir Putin is not interested in peace.

Breakdown