New York, Jan 31, 2026, 12:02 (EST) — Market closed
U.S. markets are closed for the weekend. On Friday, the Dow Jones Industrial Average slid 179.09 points, or 0.36%, finishing at 48,892.47 and marking a 0.4% drop for the week. Still, January showed a 1.7% gain — the Dow’s ninth consecutive monthly rise. Investors digested Donald Trump’s plan to nominate Kevin Warsh to lead the Federal Reserve, a stronger inflation report, and earnings that saw Apple tick up 0.4% and Verizon Communications jump 11.8%. “Markets are calibrating to Trump’s pick of Kevin Warsh … and the outlook for monetary policy,” said Michael Hans of Citizens Wealth. (Reuters)
Monday’s trading is now all about the Fed chair decision. Rates are back in control. If the chair is viewed as hawkish on inflation, bond yields could stay high, putting pressure on parts of the market reliant on low borrowing costs.
Friday’s inflation update arrived via the producer price index (PPI), measuring prices businesses get for goods and services. The PPI for final demand climbed 0.5% in December, while the “core” gauge—excluding food, energy, and trade services—jumped 0.4%. (Bureau of Labor Statistics)
The dollar bounced back after a turbulent week, with the dollar index climbing 0.79% to 96.93. The euro slipped 0.79%, landing at $1.1874. “The dollar was terribly oversold on the short-term momentum,” said Marc Chandler of Bannockburn Global Forex. John Higgins at Capital Economics described Warsh as “a relatively safe choice.” (Reuters)
Warsh, 55, who was a Fed governor from 2006 to 2011, would take the helm when Jerome Powell’s term as chair expires in May—pending Senate approval. After the nomination, rate futures, which track bets on policy moves, implied just two quarter-point cuts in 2026 (a quarter-point equals 0.25 percentage points). Heather Long of Navy Federal Credit Union called Warsh “a pragmatist” unlikely to risk market confidence with unwarranted rate cuts. (Reuters)
Metals took the brunt of the selloff. Gold futures dropped 11%, while silver tumbled 31% on Friday—their sharpest single-day declines since 1980. This brutal selloff ended a rally that had turned into a crowded trade. (The Wall Street Journal)
Politics remain a factor. Early Saturday, the U.S. government fell into a shutdown as Congress missed a funding deadline. The Senate passed a spending bill 71-29, but the House is out and not expected to vote until Monday, a Republican leadership aide said. (Reuters)
Weekend risk swings both ways. A swift end to the shutdown combined with muted rate talk might steer investors back to earnings and the broad momentum that powered the Dow in January. On the other hand, a prolonged funding gap or another inflation surprise would probably weigh on rate-sensitive stocks, challenging how much negative news equities can absorb.
Next week, attention shifts to the labor market. The Job Openings and Labor Turnover Survey comes out Tuesday, followed by the January employment report on Friday, Feb. 6. Traders will also digest ADP private payrolls numbers and weekly jobless claims, hunting for signs that the economy is cooling enough to bring rate-cut bets closer. (Bureau of Labor Statistics)
Dow traders are zeroing in on one key event: the Feb. 6 jobs report. Before that, any new developments on Warsh or Washington funding could sway the mood.
