S&P 500 Drops for Third Day as Traders Assess Trump's Fed Chair Pick

04:55 PM EST, 01/30/2026 (MT Newswires) -- The S&P 500 fell for the third day in a row as markets reacted to Kevin Warsh's nomination as the next Federal Reserve chair, while Wall Street finished January on a high note.

The S&P 500 lost 0.4% to 6,939, while the Nasdaq Composite shed 0.9% to close at 23,461.8. The Dow Jones Industrial Average fell 0.4% to 48,892.5. Most sectors ended in the red, led by materials, while consumer staples led the gainers.

This month, the Dow gained 1.7%, the S&P 500 advanced 1.4%, and the Nasdaq climbed about 1%.

The week saw losses of 0.4% for the Dow and 0.2% for the Nasdaq. The S&P 500 rose 0.3%.

President Donald Trump has picked Warsh to replace Jerome Powell as Fed chair in May. Warsh served as a governor on the central bank's board from 2006 to 2011.

Trump has repeatedly attacked Powell for not slashing the central bank's key lending rate more aggressively. The Fed held interest rates steady earlier in the week after delivering three back-to-back cuts last year amid concerns about the labor market.

"While Warsh has shown a desire to lower rates over the near-term, it's worth reminding our readers that monetary policy is set by consensus," TD Economics said in a note. "Therefore, any meaningful shift in the policy stance will require the new Fed chair to bring a majority of committee members onside, which at the moment seems unlikely."

Gold futures were last down 8.9% at $4,881 per troy ounce, while silver plunged 27% to $83.57 per ounce, both retreating from record highs. The US dollar index was up about 1%.

"Warsh is widely viewed as more hawkish than several other names that have circulated, having previously resigned from the Fed in disagreement over unconventional monetary policy tools such as quantitative easing," Saxo Bank said in a Friday report.

"Hawks" are policymakers that focus on controlling inflation by raising interest rates. The yellow metal has an inverse relationship with interest rates.

US Treasury yields were mixed, with the 10-year rate up 1.3 basis points at 4.25% and the two-year rate decreasing 2.8 basis points to 3.54%.

West Texas Intermediate crude oil was last up 0.6% at $65.80 a barrel amid tensions between the US and Iran. Oil prices were on track for weekly and monthly gains.

St. Louis Fed President Alberto Musalem said Friday it would be "unadvisable" to ease monetary policy into accommodative territory as inflation remains above policymakers' target.

"I could support a lower policy rate if further signs of labor market weakness emerge, provided there are no signs of increased persistence in above-target inflation and inflation expectations remain anchored," Musalem said. "I could also support lowering the nominal policy rate if expected inflation declines sustainably to 2% or below."

In company news, Visa (V) shares fell 3%, the steepest decline on the Dow. The payments giant's fiscal second-quarter outlook late Thursday implied a step-down in sequential revenue growth.

American Express (AXP) dropped 1.8%, also among the worst performers on the Dow, after the payments company's fourth-quarter earnings fell slightly short of Wall Street's expectations.

Verizon Communications (VZ) jumped nearly 12%, the top gainer on the Dow and the second-best on the S&P 500. The telecommunications giant provided a full-year earnings outlook above the Street's estimates and recorded better-than-expected fourth-quarter results amid strong growth in postpaid phone subscribers.

Deckers Outdoor (DECK) surged nearly 20% after multiple analysts raised their price targets on the footwear designer and distributor's shares. The company late Thursday reported stronger-than-expected fiscal third-quarter results and raised its full-year outlook.

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