Markets slide ahead of Trump's announcement on new Fed Chair
We had previously anticipated a "wild Wednesday" this week.
Instead, markets gave us a "turbulent Thursday", and risk assets are already headed for a "frail Friday"
Tale of Two Halves (Jan 26-30)
For context, earlier this week we wrote about the new record highs for the likes of:
Commodities: Gold, Silver, and Copper
Stock indices, such as the SP500 (as we'd expected since listing it among our "3 Assets to Watch" this past Monday, Jan 26)
And in case you missed any of these, other major assets also soared:
Oil (Bybit: UKOUSD) surged to its highest levels since August 2025.
EURUSD+ surged to its highest levels since 2021!
AUDUSD+ surged to its highest levels in nearly 3 years (since Feb 2023)
Much of the price moves listed above were driven by the weakening US dollar, which sank to its weakest levels in almost 4 years.
Then, each of the assets listed above saw heightened volatility on Thursday (Jan 29), before extending declines today (Friday, Jan 30)!
Cryptos not spared from selloff
Amid the broader selloff, Bitcoin has sunken to a new year-to-date low after being resisted yet again at its 50-day simple moving average (SMA) earlier this week.
US-listed Bitcoin exchange-traded funds (ETFs) have recorded 3 straight months of net outflows, to the tune of about US$ 5.7 billion, while traders will be warily eyeing the big, round $80,000 for psychological support.
3 reasons why markets are falling
1) Trump's surprise pick for new Fed Chair
President Trump has teased an announcement slated today (Friday, Jan 30) on his new pick for the Fed Chair (the boss of the world's most influential central bank) - and it may not be who markets expected.
Just days ago, Polymarket odds showed BlackRock senior exec Rick Rieder leading the pack of Fed Chair candidates, with Fed Governor Christopher Waller also in the mix.
However, latest reports now suggest that the new Fed Chair could be former Fed Governor, Kevin Warsh.
Warsh is seen to be relatively more hawkish than the other leading candidates.
And we know that stocks, gold, even cryptos generally shudder at the thought of higher US interest rates (or rates not going down quickly).
Hence, the idea of a less-dovish Fed Chair prompted a repricing across major asset classes, and a slight rebound in the US dollar.
2) Microsoft stokes concerns over AI ROI
Microsoft had a torrid Thursday, as it fell 10% and:
erased US$ 357 billion in value (market cap)
posted its biggest 1-day drop since the pandemic (March 2020)
suffered the 2nd biggest, single session drop of any public company's market cap in stock market history!
Microsoft shares tanked after its earnings announcement, released after US markets closed on Wednesday (Jan 28), unveiled record spending on AI while growth for its Azure cloud-computing unit slowed quarter-on-quarter.
In other words ...
Microsoft's heavy investments into AI may not pay off, at least not spectacularly.
It remains to be seen whether the market's reaction to Apple's earnings, released after US markets closed yesterday (Thursday, Jan 29), will show that such concerns have subsided.
Apple announced record quarterly sales and better-than-expected earnings forecasts, though still warned of pressured margins due to rising prices of memory components.
But with US stock futures falling at the time of writing, with the SP500 and NAS100 continuing their respective slides, this points at declines at the US stock market open.
3) Rising geopolitical tensions
President Trump is also escalating his threats against Iran, which is prompting fears of supply-side risks for oil.
Even so, with geopolitical unrest seen in various parts of the global stage, it appears to be adding to the general unease across global financial markets.