US stocks slid on Friday after President Donald Trump named Kevin Warsh as his pick for Federal Reserve chair. A hotter Producer Price Index (PPI) report also pushed investors away from bets on near-term rate cuts.
The S&P 500 extended Thursday’s pullback as traders reassessed inflation risks and policy direction. Markets also tracked heavy insider selling and fresh tech volatility.
US equities stayed under pressure in New York on Friday morning. The S&P 500 Index fell 0.2% at 9:35 a.m., while the NASDAQ 100 Index lost 0.4%. The Dow Jones Industrial Average slipped 0.2%.
Later moves showed a wider retreat. The S&P 500 fell 0.3% at 10:36 a.m., and the NASDAQ 100 declined 0.5%. The Dow dropped 0.4%, while the Russell 2000 Index slid 1.3%.
Matt Maley, chief market strategist at Miller Tabak + Co., said traders view Warsh as less supportive of deep rate cuts. Neil Dutta, head of economic research at Renaissance Macro Research, said markets reacted as expected. He pointed to weaker equity futures and higher longer-term rates.
Warsh previously served on the Federal Reserve’s Board of Governors from 2006 to 2011, according to Bloomberg. Bloomberg also said Warsh has advised Trump on economic policy. Trump passed over Warsh in 2017 when he selected Jerome Powell.
Friday’s PPI report came in hotter than expected, according to the report. The release reflected higher costs for services and weakened hopes for additional easing. PPI measures wholesale price changes that can feed into consumer inflation.
Markets still priced a low likelihood of a rate cut at the March or April Federal Reserve meetings. Dutta said near-term policy choices can lead to tougher hikes later. He also said Warsh’s reputation as a policy hawk shaped the market reaction.
Treasury trading showed a steeper curve after the announcement. The yield on two-year Treasuries fell two basis points to 3.54%. Meanwhile, 30-year yields rose to 4.88%, and the 10-year yield ticked up one basis point to 4.25%.
Krishna Guha at Evercore said the pick could stabilize the dollar and challenge “debasement” trades, which weighed on gold and silver. However, he warned against pushing a hawkish repricing too far and flagged whipsaw risk. TD Securities said investors may struggle to pin down Warsh’s views given his notable shifts.
Corporate insiders sold shares at the fastest pace in five years, according to the Washington Service. The data showed almost 1,000 executives sold stock this month, compared with 207 who bought. Joe Gilbert, a portfolio manager at Integrity Asset Management, said insider behavior can signal forward returns.
Bloomberg Intelligence data added another caution signal. Of about 150 companies reporting as of Thursday morning, 77% beat earnings estimates. This pace tracked toward the weakest showing in a year, the data showed.
Positioning also turned more defensive, based on the cited reports. Deutsche Bank AG data showed bearish and neutral sentiment climbed to four-week highs. Goldman Sachs Group Inc.'s prime brokerage data showed the largest net single-stock selling in four weeks as of January 23.
Amazon.com Inc. discussed investing as much as $50 billion in OpenAI and expanding a computer-power agreement, according to a person with knowledge.
Sandisk Corp. surged after revenue beat expectations, and an upgrade followed an improved outlook.
Exxon Mobil Corp. exceeded profit expectations as higher production helped offset lower crude prices.
Chevron Corp. also beat expectations, supported by higher oil production despite softer crude prices.
American Express Co. fell after a Platinum card refresh raised expenses and profit missed estimates.
Verizon Communications Inc. reported its biggest mobile subscriber gain since 2019 and announced up to $25 billion in buybacks.
Charter Communications Inc. posted its first pay-TV customer increase in more than five years.
Eli Lilly & Co. did not win backing from the European Union medicines regulator for Mounjaro use in a heart-failure setting tied to obesity.
Costco Wholesale Corp. will use Instacart technology for online grocery ordering in Spain and France, extending its partnership beyond North America.
Across markets, the Bloomberg Dollar Spot Index rose 0.6%, while the euro fell to $1.1890. Bitcoin dropped 1.6% to $83,064.2, and Ether fell 2.9% to $2,733.04. Spot gold slid 5.8% to $5,064.39 an ounce, while West Texas Intermediate rose 0.3% to $65.59 a barrel.
Looking ahead, investors will track Warsh’s confirmation path and incoming inflation data for policy signals. Traders will also monitor March and April Fed meetings as rate-cut probabilities adjust. Earnings updates, insider activity, and geopolitics remain key drivers for US stock direction.