US Equity Indexes Muted, Treasury Yields Rise After Trump Appears to Rule Out Hassett as Next Fed Chair

01:15 PM EST, 01/16/2026 (MT Newswires) -- US equity indexes were muted to mixed in midday trading on Friday amid strong gains in government bond yields, as President Donald Trump appeared to signal National Economic Council Director Kevin Hassett may not be the next head of the Federal Reserve.

The Nasdaq Composite was almost unchanged at 23,542.6, and the S&P 500 was little changed at 6,950.3, while the Dow Jones Industrial Average was steady at 49,444.2.

Materials, communication services, and utilities were among the steepest decliners. Industrials and real estate led the gainers.

On Friday, former Federal Reserve Governor Kevin Warsh emerged as the top choice for central bank chair following Trump's remarks about a strong contender, National Economic Council Director Kevin Hassett, multiple news outlets reported. "I actually want to keep you where you are, if you want to know the truth. Kevin Hassett is so good," Trump was cited as saying in a Dow Jones report published by Morningstar.

Trump's reluctance to nominate Hassett as Fed chair contributed to the declines in US stocks and bonds Friday morning, Tom di Galoma, a managing director at Mischler Financial Group, said in the Dow report. Hassett was the candidate regarded as most likely to advocate for lower rates. Bond prices and yields are inversely correlated.

Most US Treasury yields jumped, with the 10-year yield up 5.1 basis points to 4.21% and the two-year rate higher by three basis points to 3.59%.

In economic news, US industrial production rose by 0.4% in December, compared with expectations for a smaller 0.1% increase in a survey compiled by Bloomberg, and following an upwardly revised 0.4% increase in November.

The National Association of Home Builders' monthly housing market index fell to 37 in January from 39 in December, compared with expectations for 40 in a Bloomberg-compiled survey. The index was below the 47 print a year earlier as affordability challenges and high building costs remain headwinds.

Shares of power companies fell after multiple media outlets reported that the Trump administration is pushing for technology firms to shoulder the costs of new power plants in connection with a surge in the construction of artificial intelligence data centers. Constellation Energy (CEG) slumped 10%, among the worst performers on the S&P 500 and the Nasdaq. Vistra (VST) dropped 6.6%, among the laggards on the S&P 500.

PNC Financial Services (PNC) advanced 4.2% after the lender reported Q4 results above Wall Street's forecast amid net interest income gains and lower provision for credit losses. State Street (STT), however, reported a decline in Q4 earnings, and its shares slid 4.5%.

Micron Technology (MU) said it is breaking ground on a $100 billion leading-edge memory manufacturing complex in Onondaga County, New York, which will include up to four fabs. Shares jumped 5%, among the top gainers on the S&P 500 and the Nasdaq.

Gold futures slid 0.6% to $4,594.3 and silver futures dropped 4.2% to $88.44.

West Texas Intermediate crude oil futures rose 1.2% to $59.92 a barrel.

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