Markets Turn Volatile After Trump Picks Warsh for Fed; Gold & Silver Crash, Asia Slips, SpaceX IPO Talk

The Big Picture: One Policy Signal, Many Market Reactions

Global markets saw a sharp shift in sentiment after Donald Trump said he would nominate Kevin Warsh to lead the Federal Reserve—a development that quickly rippled through currencies, bonds, equities, and commodities. U.S. stocks finished modestly lower, but the bigger drama hit precious metals, where gold and silver suffered historic one-day declines.

U.S. Stocks: Small Daily Drop, But January Still Ends in the Green

U.S. equities closed slightly lower as investors recalibrated rate expectations and digested the policy implications of the Fed-chair nomination news.

  • The S&P 500 fell about 0.4%.

  • The Dow slipped about 0.4%.

  • The Nasdaq dropped about 0.9%.

Even with the late-session volatility, the broader takeaway for many investors was this: the month of January still finished positive for major U.S. benchmarks, highlighting that the pullback looked more like repositioning and profit-taking than a full risk-off regime shift.

Why tech felt heavier

When markets start repricing the “rate path,” long-duration assets—especially growth and tech—tend to react first. That dynamic helped explain why the tech-heavy Nasdaq underperformed on the day.

Dollar and Yields: The “Confidence Trade” Takes Over

The nomination news boosted the U.S. dollar and pushed Treasury yields higher in the front end, reflecting a market view that policy could stay tighter—or at least more inflation-sensitive—than some traders had positioned for.

A key subplot: the nomination was widely interpreted as reducing near-term uncertainty around the Fed’s direction versus more extreme scenarios markets had been gaming out. That “less uncertainty” impulse often supports the dollar and pressures non-yielding assets.

Precious Metals: A Historic 24 Hours for Gold and Silver

The most dramatic moves hit commodities. Gold and silver, which had been riding a powerful momentum wave, suddenly reversed—hard.

Gold: Record-scale daily drop

Gold futures fell roughly 11%, marking one of the largest one-day drops on record in modern trading.

Silver: From momentum favorite to forced unwind

Silver’s selloff was even more violent:

  • Silver futures fell about 31% on the day (a decline described as among the steepest since 1980).

  • Intraday, some reporting indicated silver retraced to around $75/oz—roughly 35% below earlier levels—underscoring how quickly leveraged positioning can unwind when momentum breaks.

  • Despite the crash, silver still ended January up on a month-over-month basis in several market summaries, showing how extreme the earlier rally had become.

“Market value wiped out”: how big was it?

One widely cited estimate framed the drawdown as trillions of dollars in combined market value erased across gold and silver during the rout. For example, MarketWatch pegged the notional wipeout at roughly $7+ trillion.
(Important nuance: these figures are estimates, typically derived by applying price moves to broad stock/ownership measures—not the same as realized losses.)

Asia’s Follow-Through: Hong Kong and Mainland China Pull Back, But January Momentum Persists

The commodity shock and risk recalibration carried into Asia, hitting mining- and materials-linked shares especially hard.

Hong Kong: Hang Seng drops sharply on the day

  • The Hang Seng Index closed around 27,387, down about 2.08% (−580.98 points).

  • Yet January still ended up +6.85%, marking the first monthly gain in several months and reinforcing that the bigger trend remained constructive even after the Friday correction.

Mainland China: CSI 300 and Shanghai pressured by miners/materials

  • The CSI 300 closed around 4,706 (about −1.00%).

  • Market commentary tied the weakness to the metals reversal and profit-taking, with mining shares singled out as a major drag.

  • The Shanghai Composite still finished January up about +3.76%, its best monthly performance since late 2025 in some data summaries.

Indonesia: Regulators Resign After a Confidence Shock

In one of the most consequential governance storylines of the week, top officials at OJK and the Indonesia Stock Exchange stepped down following intense market turbulence and scrutiny around transparency and free-float conditions.

The catalyst was a warning from MSCI about potential classification risk—an issue that can matter enormously for foreign flows because index status affects institutional allocation rules. Reuters reported Indonesia was given a window until May 2026 for progress before a reassessment.

Corporate Spotlight: SpaceX IPO Talk Heats Up

Away from macro turmoil, investors also tracked a blockbuster corporate rumor: reports that SpaceX could pursue an IPO as early as June 2026, potentially at a valuation above $1.5 trillion.

Reuters reported that the company generated roughly $15–$16 billion in 2025 revenue and about $8 billion in profit, and that banks have discussed fundraising exceeding $50 billion in an IPO scenario.
Additional reporting also pointed to timing themes tied to Elon Musk and early-summer positioning.

What to Watch Next

Near-term catalysts that could keep volatility elevated

  • Confirmation politics and Fed signaling: markets will parse how quickly the nomination moves and what it implies for rate guidance.

  • Metals stabilization vs. continued deleveraging: after such a sharp move, liquidity and positioning can matter more than fundamentals in the short run.

  • Asia data + risk appetite: upcoming China releases (like PMI) often become “tie-breakers” after big cross-asset moves.

  • Indonesia reform follow-through: investor confidence will hinge on whether proposed governance and free-float improvements become enforceable policy ahead of the May review window.

  • SpaceX next steps: watch for any formal signals—bank mandates, filings, or updated guidance that confirms (or denies) IPO timing.

Disclaimer: This article is for informational purposes only and is not investment advice.

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