Stocks opened lower on Friday and remained in the red throughout the trading session, driven primarily by a significant sell-off in precious metals alongside mixed earnings reports. In a notable development, President Donald Trump announced via Truth Social that he has nominated Kevin Warsh to replace Jerome Powell as Chair of the Federal Reserve, pending Senate confirmation. Trump expressed confidence in Warsh, stating he would be one of the “great Fed Chairmen,” emphasizing their long-standing acquaintance and promoting Warsh’s image as fitting for the role.
Warsh’s previous tenure on the Federal Reserve Board from 2006 to 2011, along with his earlier candidacy for Treasury secretary, positions him as a familiar figure in financial circles. Despite his historical hawkish stance on inflation, recent statements suggest he may advocate for lower interest rates. Nevertheless, economists like Deutsche Bank’s Matthew Luzzetti warn that a shift in monetary policy would require convincing his fellow committee members, particularly in light of current labor market conditions and inflation trends.
Financial markets reacted to the Fed chair announcement, halting the recent decline of the U.S. dollar. The U.S. Dollar Index (DXY) concluded the day up 0.9%. This dollar strength contributed to a sharp decline in gold and silver prices, with gold dropping 11% to $4,745.10 per troy ounce and silver decreasing by 31% to $78.53 per troy ounce. Analysts suggest this adjustment reflects a healthy correction after the metals’ substantial gains earlier this year, although they maintain that precious metals remain appealing long-term investments.
The sell-off in precious metals also impacted several mining companies, with Freeport-McMoRan losing 7.5% and Kinross Gold falling 13.8%. In the broader market, American Express faced a 1.8% drop, attributed to fourth-quarter earnings that fell short of analyst expectations, despite a top-line beat and the announcement of a 16% increase in its quarterly dividend—marking its fifth consecutive annual hike.
Apple’s fortunes were mixed; after experiencing a drop of over 2%, the tech giant managed to close with a modest gain of 0.5%. Its fiscal first-quarter results exceeded expectations, notably bolstered by a 23% increase in iPhone revenue. However, analysts raised concerns about upcoming challenges, such as integrating Google’s AI models and rising memory chip costs that could impact gross margins.
As for the major indices, the Dow Jones Industrial Average declined by 0.4% to close at 48,892, while the S&P 500 also fell 0.4% to finish at 6,939. The tech-heavy Nasdaq Composite experienced a slightly steeper decrease, dropping 0.9% to end the day at 23,461.
