(Updates prices to afternoon trading, adds analyst comment )
Indexes down: Dow 0.47%, S&amp;P 500 0.39%, Nasdaq 0.72%
Small-cap Russell 2000 underperforms large caps
Apple shares fall after quarterly results
Gold and silver miners fall, tracking metal prices
By Sinéad Carew and Pranav Kashyap
Jan 30 (Reuters) - U.S. stocks fell on Friday as investors viewed President Donald Trump’s nomination of former Federal Reserve Governor Kevin Warsh as a hawkish choice to succeed Federal Reserve Chair Jerome Powell, while also digesting earnings reports and a high inflation reading. On top of assessing the risks from U.S. tensions with countries including Iran, investors also worried about the prospect of another U.S. government shutdown after new barriers emerged in the Senate to a deal that would ensure continuation of funding for agency operations.
At the Fed, Warsh, 55, is expected to favor lower interest rates but stop short of the more aggressive monetary easing linked to some other potential nominees. With Powell’s term ending in May, Warsh, if confirmed by the Senate, would take the helm of a central bank he has argued should scale back its role in the economy and rethink its approach to monetary policy. In earnings, Apple (AAPL.O) shares fell a day after the iPhone maker released quarterly results. On the data front, producer prices increased more than expected in December, suggesting inflation could pick up in the months ahead.
“There’s a combination of investor concerns around the Fed chair announcement, some mixed tech earnings and lingering inflation pressure as well as some uncertainty about a potential government shutdown even though it should be short-lived,” said Angelo Kourkafas, senior global strategist at Edward Jones. At 2:16 p.m. EST, the Dow Jones Industrial Average (.DJI) fell 229.58 points, or 0.47%, to 48,841.98, the S&amp;P 500 (.SPX) lost 27.44 points, or 0.39%, to 6,941.57 and the Nasdaq Composite (.IXIC) lost 171.05 points, or 0.72%, to 23,514.18.
The small-cap Russell 2000 index (.RUT) , which is more sensitive to interest rates, fell 1.1% on the day. The S&amp;P’s Materials index (.SPLRCM) dropped 1.8%, leading declines among the S&amp;P 500’s 11 major industry sectors as U.S.-listed gold and silver miners tumbled on a massive selloff in precious metals with a more than 9% drop in gold prices and a 28% slide in silver.
Defensive consumer staples (.SPLRCS) led gainers with a 0.9% rise.
The CBOE volatility index - Wall Street’s “fear gauge” - pared earlier gains and was below its one-week high reached on Thursday but was still up 0.55 point on the day at 17.39.
The Russell 2000 was on track to end the month up nearly 6%, compared with monthly advances of just over 1% each for the S&amp;P 500 and the Nasdaq. The Dow, meanwhile, was poised to notch a ninth consecutive monthly advance, its longest winning streak since 2018.
<h3>SMALL-CAPS OUTPERFORM IN JANUARY</h3>
Apple, wrapping up the week’s tech results, forecast higher-than-expected revenue growth of up to 16% for the March quarter, but warned that rising memory-chip prices had started to pressure profitability.
Investors responded to Big Tech earnings this week with a stark warning: record capital-spending binges will be tolerated as long as the growth keeps coming.
Microsoft (MSFT.O) was down 0.4% on Friday after falling 10% on Thursday for its deepest daily loss since March 2020 after its cloud revenue failed to impress, while Meta (META.O) had jumped 10% on Thursday.
On Friday, Tesla (TSLA.O) shares rose 4%, following reports that SpaceX is exploring deals with the electric-vehicle maker and other companies run by Elon Musk.
The bar has risen for the AI trade that propelled U.S. equities to record highs over the past year, and signs of crowding in those high-growth names have prompted investors to rotate into small-caps and other overlooked corners of the market.
SanDisk (SNDK.O) shares jumped 9% after a better-than-expected third-quarter forecast as AI fuels storage demand. KLA Corp (KLAC.O) shares tumbled 13.7% even after the company beat Wall Street expectations for second-quarter profit and revenue.
Declining issues outnumbered advancers by a 1.93-to-1 ratio on the New York Stock Exchange, where there were 189 new highs and 134 new lows. On the Nasdaq, 1,523 stocks rose and 3,151 fell as declining issues outnumbered advancers by a 2.07-to-1 ratio. The S&amp;P 500 posted 16 new 52-week highs and 10 new lows while the Nasdaq Composite recorded 58 new highs and 186 new lows.

U.S. stocks declined as investors reacted to President Trump's nomination of Kevin Warsh for the Federal Reserve, viewing it as a hawkish choice. The Dow fell 0.47%, S&P 500 down 0.39%, and Nasdaq dropped 0.72%. Concerns over inflation, mixed earnings reports, and potential government shutdown added to market anxiety. Apple shares fell post-earnings, while small-cap stocks outperformed in January. Defensive sectors gained, but gold and silver miners suffered due to falling metal prices. Overall, market sentiment was cautious amid economic uncertainties.

- U.S. stocks declined as President Trump's nomination of Kevin Warsh raised concerns about monetary policy and inflation, compounded by mixed earnings reports.  
- The Dow fell 0.47%, S&P 500 down 0.39%, and Nasdaq dropped 0.72%, with Apple shares also declining post-earnings.  
- Investor uncertainty surrounding potential government shutdowns and interest rate adjustments contributed to overall market volatility, despite small-cap stocks outperforming in January.

Reuters

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US STOCKS-US stocks slide as investors fret over Trump's Fed nominee, earnings, inflation