Global Stocks Fall, Metals Slump as Markets Digest Trump's Fed Chair Pick — Update

By Kimberley Kao and Adam Whittaker

Global stocks fell on Monday and metals tumbled as markets digested President Trump's nomination of Kevin Warsh as the next chair of the Federal Reserve.

Equity indexes in Asia and Europe followed a negative lead from Wall Street on Friday, while the massive rallies staged by gold and silver unwound further as market participants weigh the implications of a possibly slower, shallower easing cycle under a Warsh-led Fed.

Trump's Fed pick has unleashed volatility across asset classes as investors reassess positioning in currencies, commodities and equities, particularly after the dollar rebounded, Tareck Horchani at Maybank Securities said.

Adding to the volatility was top commodity exchange CME Group's move to raise margin requirements for precious metal futures. The uplift takes effect after Monday's close and raises the cost of holding positions, forcing traders to commit more capital and typically weighing on prices and trading activity.

Gold margins will increase to 8% from 6% for non-heightened risk profile contracts. For heightened risk profile contracts it will increase to 8.8% from 6.6%. Silver margins will jump to 15% from 11% for non-heightened risk profile contracts. For heightened risk profile contracts it will increase to 16.5% from 12.1%.

In Europe, equity indexes steadied in early trade after dropping sharply at the open. The FTSE 100 dropped 0.2% as precious metals miners dragged the index lower.

Meanwhile, a risk-off sentiment in Asia dragged on precious metals and technology-linked equities, which benefited from dollar weakness and are heavily represented in Asian benchmarks, Horchani added.

A steep selloff in South Korea triggered a brief trading halt as regulators sought to quell volatility. The benchmark Kospi closed down 5.6% as large-cap tech stocks dropped.

The Japanese Nikkei 225 index dropped 1.3%, pushed lower by energy stocks and financials, while Hong Kong's Hang Seng declined 2.2%.

U.S. futures tied to the Dow, S&P 500, and Nasdaq were trading 0.3%, 0.6% and 0.8% lower.

"The news of Kevin Warsh as the next Fed chair has nudged markets toward 'fewer/slower cuts'", Charu Chanana, chief investment strategist at Saxo Singapore said.

Warsh has been a critic of the Fed in the past, opining that it should only have one mandate: price stability, Maybank analysts wrote in a note. His nomination has prompted market players to drop the "dollar debasement" narrative, sending gold, silver and copper tumbling after sharp run-ups in January, they said.

Spot gold was last down 5% while spot silver slumped over 8%. The three-month LME copper contract was 3.8% lower. Mining stocks in Indonesia, China and South Korea slid, with major names like Vale Indonesia, Zijin Mining and Korea Zinc notching sharp losses.

In London, precious metal miners Hochschild Mining, Fresnillo and Endeavour Mining were all down around 7%. Diversified miners Anglo American and Glencore dropped around 3%.

The pullback in metals is having a domino effect, Chanana said.

"Once metals turn into a leverage unwind, the spillover is classic: forced de-risking and 'sell what's liquid to raise cash,' which hits equities too," she said.

Write to Kimberley Kao at kimberley.kao@wsj.com and Adam Whittaker at adam.whittaker@wsj.com

(END) Dow Jones Newswires

February 02, 2026 04:58 ET (09:58 GMT)