Stock market today: Dow, S&P 500, Nasdaq slide after Trump picks Warsh for Fed; gold, silver plunge

Wall Street’s major indices tumbled on Friday, capping a volatile week as investors grappled with a major shake-up at the Federal Reserve, a dramatic reversal in precious metals, and a fresh wave of trade-war rhetoric from the White House. The announcement that President Trump intends to nominate former Fed governor Kevin Warsh as the next chair of the U.S. central bank sent shockwaves through the market, boosting the dollar while crushing a months-long rally in commodities.

The move adds a significant layer of uncertainty for investors already navigating a mixed earnings season and simmering geopolitical tensions. Friday’s sell-off threatened to push the market into its third consecutive weekly loss, even as the major averages remain on track to close out January 2026 with gains.

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The Big Picture: A Sea of Red

Markets recoiled sharply following the administration's announcement on the Fed. Technology stocks, a recent source of market weakness, led the declines, while a surging U.S. dollar weighed heavily on everything from multinational corporate profits to commodity prices.

• Dow Jones Industrial Average (^DJI): Dropped 550 points, or 0.9%.
• S&P 500 (^GSPC): Fell 0.7%, sliding further from its record highs.
• Nasdaq Composite (^IXIC): Lost 0.9%, confirming another difficult session for the tech sector.
• U.S. Dollar Index (DX-Y.NYB): Rallied sharply on the prospect of a more hawkish Federal Reserve.
• Gold (GC=F): Plunged below the key psychological level of $5,000 per ounce.
• Silver (SI=F): Cratered in its worst session of the year, sinking as much as 25%.

Why It Matters: The Warsh Effect

The market's sharp, negative reaction was centered on the nomination of Kevin Warsh to succeed the current Fed chair. Investors are now scrambling to calculate the policy implications of a Warsh-led Federal Reserve, and the initial read is one of deep uncertainty.

Warsh, who served as a Fed governor during the 2008 financial crisis, has a history of hawkish commentary, often warning about inflation and advocating for higher interest rates. This stance would typically signal tighter monetary policy, which tends to strengthen the dollar but act as a headwind for stock valuations.

However, his recent pivot has confused the picture. In recent months, Warsh has voiced support for interest rate cuts—a policy President Trump has aggressively and publicly demanded. This has left Wall Street to decipher whether Warsh would pursue his historically hawkish instincts or align with the President's dovish agenda.

• The Warsh Conundrum: A former hawk on interest rates, Warsh has recently advocated for cuts, aligning with President Trump's demands but creating significant policy uncertainty for investors trying to price assets for the coming years. The ambiguity over his future policy direction is a key driver of Friday's volatility.

Commodity Carnage: Metals Rally Screeches to a Halt

The biggest casualty of the day's news was the commodities market. The roaring rally in precious metals that has defined early 2026 came to a screeching and violent halt.

The primary driver was the surging U.S. dollar. As the dollar strengthens, commodities priced in dollars become more expensive for foreign buyers, typically depressing demand. Furthermore, the prospect of a hawkish Fed chair reduces the appeal of non-yielding assets like gold.

• Metals Meltdown: Gold (GC=F) and Silver (SI=F) saw their steepest declines of the year. Silver’s 25% plunge was particularly brutal, wiping out weeks of gains in a single session. The move in gold below the closely watched $5,000 level signals a major sentiment shift, putting the brakes on a spectacular bull run.

Trade Tensions Simmer on Multiple Fronts

Adding to the risk-off tone, the White House escalated trade disputes with two of its largest partners, reminding investors that tariff threats remain a key tool of the administration's foreign policy.

The focus was squarely on North America, with new threats leveled against both Canada and Mexico. These moves could disrupt critical supply chains and invite retaliatory measures.

• North American Trade Friction: President Trump threatened to impose a 50% tariff on Canadian aircraft imports and, in an unprecedented move, decertify all new jets from manufacturers like Bombardier (BDRBF). The administration claims this is in response to Canada using its own certification hurdles to effectively block sales of U.S.-made Gulfstream jets.
• New Levies on Mexico: The administration also signaled its intent to impose new tariffs on Mexico, this time targeting the country for its role in providing oil to Cuba. This expands the scope of trade conflicts beyond simple economic disputes into geopolitical maneuvering.

A Mixed Bag from Corporate Earnings

Friday's session closed out a crucial week of earnings reports from Big Tech, with the results painting a decidedly mixed picture of the corporate landscape.

While energy giants posted solid results, a cautious outlook from the world's most valuable company weighed on sentiment.

• Apple's Warning: Shares of Apple (AAPL) dropped 2% in the wake of its quarterly report. While the company topped profit estimates on the back of record iPhone sales, CEO Tim Cook delivered a stark warning that an ongoing global memory shortage would materially impact future profit margins, spooking investors.
• Sandisk's Surge: In a bright spot for the semiconductor space, data storage firm Sandisk (SNDK) saw its shares soar over 20%. The massive rally came after the company issued exceptionally upbeat forward guidance, suggesting robust demand for its data storage products.
• Energy Sector Strength: Oil giants Exxon Mobil (XOM) and Chevron (CVX) helped provide a floor to the market, with both companies reporting quarterly earnings that narrowly beat analyst expectations, buoyed by stable energy prices. Results from American Express (AXP) and Verizon (VZ) were also closely watched by investors.

The Bottom Line

Friday’s session serves as a stark reminder of the complex cross-currents facing investors. The market is being pulled between a still-resilient U.S. economy, a mixed earnings picture, and the significant macro uncertainties posed by shifting Fed policy and escalating trade conflicts.

Looking ahead, all eyes will be on the confirmation process for Kevin Warsh and any further clarification on his policy leanings. Meanwhile, traders will remain on high alert for any follow-through on the administration's tariff threats against Canada and Mexico. With earnings season still in full swing, market volatility is likely to remain elevated.