Stocks, precious metals, Bitcoin, and crude oil are all selling off in early trading. Interest rates and the dollar are rising. Why? The long and winding search for a new Federal Reserve Chair is over.
President Trump announced this morning that Kevin Warsh would succeed Jay Powell after his term expires in May. Warsh previously sat on the Fed board of governors from 2006 to 2011, but he has frequently criticized the Fed since then. While Trump has urged the Fed to cut interest rates early and often, it remains to be seen how Warsh will steer the ship.
You can see in the chart below that after the Warsh news started leaking, stock futures (blue line) dipped. Gold (red), silver, Treasuries, and Bitcoin all sold off, while the dollar (green) rose modestly. That market reaction suggests investors perceive Warsh to be more “hawkish” – or likely to favor tighter monetary policy, all else being equal – than other potential candidates.
Gold, Dollar Index, S&P 500 Futures (1-Day % Change)
Source: TradingView
In the Artificial Intelligence (AI) sector, OpenAI is accelerating plans to go public before the end of the year. The ChatGPT maker wants to beat Anthropic, the company behind the popular Claude Code tool, to market.
OpenAI has hired new executives in accounting and finance, and held talks with Wall Street firms, in hopes of launching a fourth quarter Initial Public Offering (IPO). The private company is valued at approximately $500 billion, though it’s losing billions of dollars due to aggressive AI-related spending and investment.
Finally, Apple Inc. (AAPL) blew away estimates in its fiscal first quarter, reporting earnings per share of $2.84 on sales of $143.8 billion. Analysts were expecting $2.68 and $138.4 billion, respectively. Strong sales of its flagship iPhone drove the “beat,” though a warning about the impact of memory costs on second-quarter margins kept a lid on Apple stock.
