US stocks were muted on Monday as investors continued to debate President Donald Trump picking Kevin Warsh to lead the Federal Reserve and parsed over the latest earnings.
The S&P 500 Index was little changed at 9:40 a.m. in New York. The technology-heavy Nasdaq 100 Index rose 0.227%.
“Markets are trading cautiously as investors navigate a dense macro calendar and recalibrate expectations around the pace of global monetary easing,” said Daniela Hathorn, senior market analyst at Capital.com.
Trump nominated Warsh to succeed Jerome Powell as Federal Reserve Chair on Friday. Warsh is viewed by Wall Street as a relatively hawkish choice, showing more concern over inflation and being less supportive of interest-rate cuts.
“Hawkish perceptions on Warsh appointment still linger this morning,” said Darrell Cronk, chief investment officer for wealth and investment management at Wells Fargo. “We expect Warsh to support a more dovish stance with difficulty shrinking the Fed balance sheet of any materiality. We still believe two FOMC interest rate cuts for 2026 are in the offing.”
How Wall Street views Warsh weighed on stocks and precious metals on Friday, and continued to do so on Monday. For the former, Tom Essaye of the Sevens Report noted the market was “mildly disappointed” by the nomination as Warsh had made some less-than-supportive comments on quantitative easing and made calls for “regime change” at the central bank.
“Bottom line, markets don’t ‘hate’ the Warsh choice, but markets view the Fed as a major ingredient of the 10+ year bull market in stocks and risk assets, so any potential change makes investors nervous, and we saw that Friday,” said Essaye.
While the drop in precious metals has eased, both gold and silver are extending big slumps from Friday’s dramatic selloff. Russ Mould, investment director at AJ Bell, noted that there were “many different theories” as to why gold and silver have retreated in the manner they have, including the metals being “ripe for a pull-back” after record rallies and the appointment of Warsh.
“Whatever the explanation, gold and silver are now trying to recover and both are no lower than they were in early January,” said Mould.
In terms of stock moves, Walt Disney Co. dropped after the media company gave an outlook analysts viewed as mixed. Oracle Corp. shares advanced after announcing plans to raise up to $50 billion to build additional cloud capacity.
Meanwhile, energy stocks such as Exxon Mobil Corp. and Chevron Corp. dropped alongside oil prices as geopolitical risk premiums faded after US President Donald Trump said Washington is talking with Iran. And crypto-linked stocks including Strategy Inc. dropped after Bitcoin prices slid to their lowest price since April over the weekend.
Disclaimer: This report is auto generated from the Bloomberg news service. ThePrint holds no responsibility for its content.