Stocks Fall, Trump Prepares to Pick Warsh for Fed: Markets Wrap
(Bloomberg) — Stocks fell with US Treasuries as Donald Trump’s administration prepared for the president to nominate Kevin Warsh to be the next Federal Reserve chair. Gold slid and the dollar extended gains.
Warsh, a former Fed governor and one of the four finalists on Trump’s shortlist to be the next central bank leader, visited the White House on Thursday, according to a person familiar with the matter. Still, the selection isn’t final until the president makes an announcement, said a number of people, who requested anonymity to discuss matters not yet public. Earlier, Trump said he plans to announce his pick Friday morning.
MSCI’s Asian share benchmark slipped 0.7%, and equity-index futures for the US fell 0.4%. Treasury yields climbed, while Bitcoin led a broad selloff in cryptocurrencies. Gold slid as much as 4.8% and silver dropped 6.6%.
The moves suggest an end to months of speculation over who will lead the US central bank, after Trump and his administration repeatedly criticized Fed Chair Jerome Powell for not cutting interest rates.
“If Warsh is the nominee for the next Fed chair, markets may need to rein-in expectations,”said Tim Waterer, chief market analyst at KCM Trade. “Warsh is probably more hawkish compared to the other short-listed candidates which may dampen expectations for further rate cuts.”
Trump was earlier said to be considering four candidates on his shortlist: National Economic Council Director Kevin Hassett, Fed Governor Christopher Waller, Warsh and BlackRock Inc. executive Rick Rieder.
US 10-year yields climbed four basis points and 30-year yield jumped five basis points. Bloomberg’s gauge of the dollar rose 0.3%.
Rates markets have become increasingly sensitive to signals around the Fed’s leadership, with investors now positioning for a potentially more hawkish tilt at the central bank as the White House nears a decision.
Betting markets were increasingly favoring former Warsh, seen as a more hawkish contender, with Polymarket showing his odds of becoming the next Fed chair rising above 80% on Friday, as support faded for Rieder.
What Bloomberg strategists say…
While the dollar is stronger amid speculation President Trump will name a relatively mainstream Fed Chair candidate such as Kevin Warsh, risk sentiment is souring again. Equity investors may be concerned that Warsh would be wary of delivering too many rate cuts, or this could be some fresh concerns that the AI boom has become overstretched.
— Garfield Reynolds, MLIV Team Leader. For full analysis, click here.
Trump has openly sought to shape the Fed’s rate policy through his appointments in an effort to find someone broadly acceptable to markets who’ll also share his inclination to cut rates further and faster.
“Whatever he may say now, Warsh has a long hawkish history that markets have not forgotten, so the dollar and yields are higher,” said Sean Callow, a senior analyst at ITC Markets in Sydney.
Bond investors who have spent months wagering that Powell’s successor will push for interest-rate cuts face a stress test of those bets.
Bitcoin slumped to fresh two-month lows in early Asia trade as sentiment continues to sour around the largest cryptocurrency and investors pull money out of exchange-traded funds for the token.
Corporate Highlights:
Apple’s revenue in the holiday quarter trounced Wall Street estimates, driven by strong demand for the new iPhone 17, growth in services and a rebound in China. Microsoft Corp. shares got caught up in a selloff Thursday that wiped out $357 billion in value, second-largest for a single session in stock market history. Amazon.com Inc. is in talks to invest as much as $50 billion in OpenAI and to expand the AI startup’s existing deal for computing power. SpaceX is considering a potential merger with Tesla Inc., as well as an alternative combination with artificial intelligence firm xAI, according to people familiar with the matter. US law enforcement has been investigating allegations by former Meta Platforms Inc. contractors that Meta personnel can access WhatsApp messages. Some of the main moves in markets:
Stocks
S&P 500 futures fell 0.4% as of 12:13 p.m. Tokyo time Nikkei 225 futures (OSE) fell 0.2% Japan’s Topix fell 0.3% Australia’s S&P/ASX 200 fell 0.6% Hong Kong’s Hang Seng fell 1.5% The Shanghai Composite fell 1.4% Euro Stoxx 50 futures rose 0.6% Currencies
The Bloomberg Dollar Spot Index rose 0.3% The euro fell 0.4% to $1.1919 The Japanese yen fell 0.5% to 153.80 per dollar The offshore yuan was little changed at 6.9472 per dollar Cryptocurrencies
Bitcoin fell 2.6% to $82,196.73 Ether fell 2.6% to $2,741.31 Bonds
The yield on 10-year Treasuries advanced four basis points to 4.27% Japan’s 10-year yield declined two basis points to 2.235% Australia’s 10-year yield declined one basis point to 4.82% Commodities
West Texas Intermediate crude fell 1.9% to $64.16 a barrel Spot gold fell 3.4% to $5,189.80 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Matthew Burgess, Bernadette Toh and Masaki Kondo.
©2026 Bloomberg L.P.
