Stock Market Today: SPY, QQQ Sink as Trump Selects Warsh to Succeed Powell; Government Shutdown Looms

Both the S&P 500 ETF (SPY) and the Nasdaq 100 ETF (QQQ) closed lower on Friday after President Trump nominated former Fed Governor Kevin Warsh to succeed Jerome Powell and ahead of a potential government shutdown starting on Saturday.Claim 50% Off TipRanks PremiumUnlock hedge fund-level data and powerful investing tools for smarter, sharper decisions Stay ahead of the market with the latest news and analysis and maximize your portfolio's potential Trump's decision may have taken some by surprise, as Warsh is widely known as a "hawk," or someone who favors higher interest rates in order to keep inflation in check. At the same time, Warsh has advocated for lower rates in recent months and has voiced his support for the Trump administration's tariffs. Before assuming the role of Chair, Warsh must first clear the Senate Banking Committee and then receive Senate approval. Warsh joined the Fed in 2006 under former President George W. Bush and became the youngest board member at 35. After leaving the central bank in 2011, he joined Stanley Druckenmiller's Duquesne family office as a partner. In an interview with the Financial Times, Druckenmiller praised Warsh and brushed aside claims that Warsh is a permanent hawk. "The branding of Kevin as someone who's always hawkish is not correct," he said. "I've seen him go both ways." Druckenmiller noted that a challenge Warsh would face as Fed Chair is balancing AI-driven economic growth with the risk of rising inflation. Meanwhile, the U.S. government is on track for a partial shutdown beginning on Saturday. While six of the 12 bills necessary to keep the government open have already been passed, the remaining six are still pending approval. The Senate initially combined the remaining six bills into one package, although Democratic lawmakers later took out funding for the Department of Homeland Security (DHS) following the fatal shooting of 37-year-old Alex Pretti in Minneapolis and placed it into a separate bill. On Thursday, Democratic Senators reached an agreement with the White House to pass five more bills packaged into one. However, Republican Sen. Lindsey Graham placed a hold on the legislation, stalling progress. On top of that, the bill needs approval from the House, which isn't scheduled to return until Monday. Finally, investors received troubling inflation data after the Bureau of Labor Statistics (BLS) announced that December's Producer Price Index (PPI) rose 0.5% month-over-month, above the estimate of 0.2% and registering the highest growth since July. The index measures changes in wholesale prices and serves as a leading indicator of inflation. Core PPI, which excludes volatile food and energy prices, increased by 0.7% and was also above the estimate of 0.2%.The S&P 500 (SPX) closed with a 0.43% loss, while the Nasdaq 100 (NDX) fell by 1.28%. Stay ahead of macro events with our up-to-the-minute Economic Calendar — filter by impact, country, and more.