US Stocks Dip, Gold Swings as Markets React to Trump’s Fed Pick, Warsh/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ Markets fluctuated Friday after President Trump named Kevin Warsh as the next Federal Reserve chair. Stocks dipped slightly while gold and silver saw dramatic swings. Investors remain uncertain about the Fed’s direction under Warsh, raising concerns over its future independence.
Trump’s Fed Pick Market Reaction Quick Looks
- S&P 500, Dow, Nasdaq open slightly lower on Friday.
- Gold plunges 4.4%, silver tumbles over 12% in early trading.
- Trump’s Fed chair nominee Kevin Warsh spooks markets.
- Investors fear reduced Fed independence under Trump’s influence.
- Dollar dips before rebounding; Treasury yields rise and fall.
- Apple drags on S&P 500 despite strong earnings.
- Global markets mixed; European stocks up, Asia shows uneven gains.
- Warsh seen as closely aligned with Trump’s rate-cut views.
- Analysts divided on Warsh’s long-term impact on monetary policy.
- Precious metals slide after a historic rally.
Deep Look
Markets Jitter as Trump Nominates Kevin Warsh for Fed Chair
NEW YORK — Financial markets saw volatility on Friday as investors reacted to President Donald Trump’s nomination of Kevin Warsh as the next chair of the Federal Reserve. While the U.S. stock market opened only slightly lower, gold and silver prices experienced sharp swings amid widespread uncertainty over the Fed’s future policy path.
The S&P 500 dipped 0.1%, the Dow Jones Industrial Average fell 118 points (0.2%), and the Nasdaq dropped 0.2%. Despite the modest declines, analysts noted rising caution across Wall Street as traders evaluated Warsh’s potential influence on U.S. monetary policy.
The U.S. dollar initially weakened following Trump’s announcement, before bouncing back. Yields on Treasury bonds also moved unpredictably—first rising, hinting at hopes that the Fed will stay focused on inflation control, then paring those gains. The most dramatic movements occurred in the precious metals market, where gold prices fell 4.4% to $5,120.80, while silver plunged 12.3%, ending an extraordinary 12-month surge.
Fed Independence in Question
Trump’s push to install Warsh as Fed chair has revived investor concerns about the central bank’s independence. Traditionally viewed as a politically neutral institution, the Fed is expected to make difficult monetary decisions free from short-term political pressures. Trump’s repeated calls for lower interest rates and criticism of the current Fed leadership have shaken that expectation.
Warsh, who served as a Fed governor from 2006 to 2011, is a familiar figure to markets. His prior hawkish stance on interest rates contrasts with Trump’s current calls for aggressive rate cuts. However, Warsh has recently shown signs of supporting Trump’s economic agenda, particularly in advocating for deregulation and cost-cutting measures as inflation control tools.
“Warsh is not the Fed’s guy, he is Trump’s guy,” said Thierry Wizman, global strategist at Macquarie Group. “While this doesn’t guarantee immediate rate cuts, it does suggest Warsh may be more responsive to Trump’s economic pressure.”
Investor Reaction and Stock Highlights
On Wall Street, major tech names continued to weigh on indexes. Apple led declines, dropping 1.5% despite posting stronger-than-expected quarterly earnings. Analysts suggested the market was looking beyond the earnings beat to broader concerns about future consumer demand and economic policy uncertainty.
The gold market, which had been on a historic rally, saw a sudden reversal. After topping $5,000 earlier in the week and nearing $5,600 on Thursday, gold’s rapid drop Friday indicated waning confidence in its safe-haven appeal. Silver, which mirrored gold’s rise in recent months, experienced an even steeper decline.
The surge in precious metals had been driven by a combination of factors: investor concern over high government debt, political volatility, and fears of a weakening dollar. Those same concerns now appear to be fueling renewed caution following Trump’s pick for the Fed’s top job.
Global Market Overview
European stocks rose modestly Friday, buoyed by a more stable session compared to the U.S. In Asia, performance was mixed. Stocks in Jakarta rallied following the resignation of Imam Rachman, CEO of the Indonesia Stock Exchange. That came after MSCI, a global index provider, raised transparency concerns earlier in the week.
The nomination of Warsh marks the beginning of a potential policy shift at the Federal Reserve. As markets digest the implications, volatility could remain elevated in the coming weeks—especially if Trump continues pushing for policies that challenge long-standing central banking norms.
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