Dollar Soars, Gold Crashes as Trump Nominates Warsh for Fed Chair

Markets ended the week on a volatile note as President Trump’s nomination of Kevin Warsh to succeed Jerome Powell as Fed Chair jolted rate expectations and triggered the biggest dollar rally since May. Equities pulled back across the board, with tech leading losses, while precious metals plunged and long-dated Treasury yields ticked higher. Despite Friday’s weakness, the S&P 500 still capped off its strongest month since October.

Key Headlines & Market Movers:

• Fed Leadership Shift: Warsh Nomination Jolts Markets: Trump's pick of Kevin Warsh to lead the Fed rattled markets, given Warsh’s prior hawkish leanings and emphasis on inflation risks. While Warsh had recently supported rate cuts, his historical stance suggests less appetite for aggressive easing or extended use of the balance sheet. The dollar surged, gold and silver sold off sharply, and long yields rose in anticipation of a more “orthodox” Fed stance. Still, many analysts view Warsh as pragmatic, likely to support some rate cuts while defending Fed independence.

Precious Metals Crash Amid Dollar Surge: Gold and silver saw their steepest single-day declines in decades, retreating sharply from record highs. Gold dropped nearly 10%, while silver collapsed over 25%, unwinding speculative momentum. The strengthening dollar and receding fears of monetary “debasement” drove the pullback, but analysts caution against extrapolating a fully hawkish Fed pivot from the Warsh nomination alone.

• PPI Surprise Adds to Inflation Debate: A delayed December PPI report showed hotter-than-expected wholesale inflation, with both headline and core readings topping forecasts at +0.5% and +0.4%, respectively. The data reinforced concerns that inflation pressures may linger longer than expected, potentially complicating the Fed’s path to rate cuts, especially under new leadership.

Earnings Watch: Big Names Move on Results: Post-earnings stock moves were mixed. Apple topped sales estimates and issued a solid outlook, lifting shares modestly. Deckers, Sandisk, Verizon, Chevron, and Exxon all gained on strong results. However, Visa, American Express, and KLA faced selling pressure on margin concerns. Microsoft and Meta gave back some of Thursday’s massive gains, contributing to tech’s broader pullback.

S&P 500 Sector Performance

‍

Looking Ahead

Markets now turn to upcoming Fed communications, inflation data, and confirmation hearings for Warsh, which could further refine expectations for policy direction. With the yield curve steepening and volatility likely to remain elevated, investors should prepare for a less predictable, but potentially more disciplined monetary regime as the Fed enters a new chapter.

Disclaimer

Duncan Williams Asset Management is an SEC registered investment adviser. SEC registration does not constitute an endorsement of Duncan Williams Asset Management by the SEC nor does it indicate that Duncan Williams Asset Management has attained a particular level of skill or ability.

This material prepared by Duncan Williams Asset Management is for informational purposes only and is accurate as of the date it was prepared.  It is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy or investment product. Past performance is not indicative of future results. Investing involves risks, including the risk of loss of principal. Before making any investment decision, investors should consult with their financial advisor, consider their individual financial circumstances, and carefully review all relevant information and risk factors. Duncan Williams Asset Management assumes no responsibility for errors or omissions, nor does it accept liability for any loss arising from reliance on this information.

Advisory services are only offered to clients or prospective clients where Duncan Williams Asset Management and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Duncan Williams Asset Management unless a client service agreement is in place.

This material is not intended to serve as personalized tax, legal and/or investment advice since the availability and effectiveness of any strategy is dependent upon your individual facts and circumstances. Duncan Williams Asset Management is not a legal or accounting firm. Please consult with your legal or tax professional regarding your specific tax situation when determining if any of the mentioned strategies are right for you.

‍