Market Summary: What Happened Yesterday and What Awaits Us Today (February 2)

US equity markets ended Friday’s session broadly lower, as investor caution intensified following President Donald Trump’s announcement of Kevin Warsh as his nominee to succeed Jerome Powell as Federal Reserve Chair, alongside the release of stronger-than-expected inflation data.

Technology stocks led the declines, with the Nasdaq Composite falling 0.9%. The S&P 500 and Dow Jones Industrial Average both closed down 0.4%, reflecting a risk-off tone across markets.

Despite the late-week pullback, the Dow Jones ended January higher for the ninth consecutive month, while the S&P 500 also finished the month in positive territory. The Nasdaq, however, posted a modest monthly decline — its second drop in three months — after a seven-month run of gains.

On a weekly basis, the S&P 500 managed to post gains, while both the Dow and the Nasdaq recorded losses for a third straight week.

Market volatility picked up after Trump’s early announcement of Kevin Warsh as his choice to lead the Federal Reserve. Trump praised Warsh’s credentials, suggesting he could become one of the strongest figures to hold the role, prompting fresh speculation about the future direction of US monetary policy — particularly around interest rates and the Fed’s inflation stance.

Pressure on risk assets increased further following the release of December’s Producer Price Index data. Headline PPI rose 0.5% month-on-month, while the core measure climbed 0.4%, both exceeding expectations and reinforcing concerns that inflation pressures remain persistent. The data raised doubts over the timing of any potential easing in monetary policy.

In precious metals markets, gold and silver saw sharp profit-taking after hitting record highs in the previous session. Gold prices fell around 9% to settle near $4,880 an ounce, after having surged above $5,625. Silver futures dropped roughly 28% to around $82 an ounce, retreating sharply from levels above $121.

Meanwhile, the US dollar strengthened notably, with the dollar index rising 0.8% to 97.07 points. The move marked a rebound from its lowest levels in more than four years, supported by firm inflation data and expectations that monetary policy could remain restrictive for longer.

In fixed income markets, yields on 10-year US Treasury bonds edged higher to around 4.25%, a level that continues to influence borrowing costs across the economy, including mortgages.

Cryptocurrency markets showed some stabilization, with Bitcoin rebounding to around $83,900 after dipping earlier in the session to near $81,000 — its lowest level since April.

In energy markets, US West Texas Intermediate crude futures rose 0.7% to trade near $65.85 per barrel, supported by relatively steady demand conditions.

At the individual stock level, Apple shares gained 1.3% following its earnings release, while Deckers Outdoor surged nearly 19%. Verizon climbed 12% and SanDisk added 7%. On the downside, KLA fell about 15%, Visa declined 3%, and American Express slipped roughly 2%.

Microsoft shares extended losses, falling 0.7% after a sharp drop in the previous session, while Meta Platforms declined around 3% after posting strong gains on Thursday.

Market outlook

Global markets are expected to remain volatile in the near term, with investors maintaining a cautious stance as they await further clarity on US monetary policy and the administration’s direction regarding the Federal Reserve.

Technology stocks could remain under pressure if bond yields and the dollar continue to rise. Precious metals may attempt limited technical rebounds following recent sharp losses, while oil prices are likely to trade within a narrow range as markets await fresh catalysts tied to global demand and inventory data.