New York, Jan 30, 2026, 10:06 (EST) — Regular session
- The Dow dropped roughly 0.2% in early trading as investors reacted to President Donald Trump’s choice for the next Fed chair.
- Traders mulled over concerns about the Fed’s independence and where interest rates might head next.
- Attention now shifts to a busy earnings week ahead and the U.S. jobs report due Feb. 6.
The Dow Jones Industrial Average dropped 115.38 points, or 0.24%, to 48,956.18 in Friday morning trade, pulling back from its record close the day before. 1
The initial reaction came after Trump nominated former Federal Reserve Governor Kevin Warsh to replace Jerome Powell as chair. Traders suggested this could alter discussions on interest rates and the Fed’s autonomy. 2
Warsh’s appointment wraps up months of speculation but sparks fresh questions about how much freedom the Fed has to navigate policy amid political pressure. Lloyds FX strategist Nick Kennedy described Warsh’s past as “more on the hawkish side,” while Spartan Capital’s Peter Cardillo noted that markets remain cautious, waiting to see if Warsh will be swayed by the White House. 3
Powell’s chairmanship wraps up in May, but Warsh still requires Senate approval. Senator Thom Tillis, a Republican on the Senate Banking Committee, has made clear he’ll block any Fed nominee until the Justice Department finishes its investigation into Powell, Reuters reports. 4
The Dow’s moves often seem exaggerated because a handful of expensive stocks can swing the index significantly. Since it’s price-weighted, the costlier shares have more sway; MarketWatch pointed out that a $1 change in any Dow stock nudges the index by about 6.16 points. 5
Thursday’s close revealed the tug of war in the market. The Dow rose 55.96 points, or 0.11%, to 49,071.56, despite the S&P 500 and Nasdaq slipping amid a tech selloff led by Microsoft. “Microsoft disappointed,” said John Praveen, managing director and co-CIO at Paleo Leon, citing worries that returns on AI investments might take longer than expected. 6
Investors enter February with little tolerance for surprises. “For those companies where expectations have become very, very lofty, the onus is going to be on them to deliver,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors, in a Reuters interview. Alphabet and Amazon’s upcoming earnings will be key markers, while the U.S. jobs report on Feb. 6 is also in focus; a Reuters poll projects payrolls rising by 70,000. 7
But the setup remains delicate. Should Warsh’s confirmation stall or stir fresh doubts over Fed independence, markets leaning on steady policy could swiftly adjust. A payrolls miss or another round of earnings casting shadows on heavy AI investment might strike the most crowded market sectors first.
Friday’s headlines on the Fed pick will grab traders’ attention before they shift focus to next week’s megacap earnings and the Feb. 6 jobs report as the next major catalysts.
