US close: Stocks lower as Trump announces Fed pick, PPI comes in hotter than expected

(Sharecast News) - Major indices were in the red at the close of trading on Friday after Donald Trump announced his nominee for head of the Federal Reserve and December's PPI report showed wholesale inflation rising sharply at end of 2025.

At the close, the Dow Jones Industrial Average was down 0.36% at 48,892.47, while the S&P 500 shed 0.43% to 6,939.03 and the Nasdaq Composite saw out the session 0.94% weaker at 23,461.82.

The Dow closed 179.09 points lower on Friday, erasing gains recorded in the previous session.

Friday's primary focus was news that Donald Trump had tapped former Fed governor Kevin Warsh to replace Jerome Powell as the next chair of the Federal Reserve. Warsh served as Fed governor between 2006 and 2011.

"I have known Kevin for a long period of time, and have no doubt that he will go down as one of the GREAT Fed Chairmen, maybe the best," said Trump.

Kathleen Brooks, research director at XTB, said Warsh was a renowned hawk when he was a Fed governor. However, she noted that he has recently aligned himself with Donald Trump in calling for lower interest rates.

Brooks added: "This is an interesting pick from the president and may give the market some hope that Fed independence will be preserved by elevating a former Fed insider."

Spot gold and silver dropped on the news, down roughly 9% and 28%, respectively. However, over the past year, gold and silver were still around 67% and 142% higher, respectively.

In the corporate space, Apple saw a surge in demand for iPhones over Christmas, helping to push quarterly revenues at the US tech giant up to a record $144bn. Posting first-quarter numbers after the bell on Thursday, Apple said total net sales in the three months to 27 December surged 16% to $143.8bn, well ahead of expectations.

Chevron posted fourth-quarter earnings that topped analyst expectations thanks to record oil production, while Exxon beat estimates as lower-cost output from Guyana and the Permian helped offset weaker oil prices.

American Express pointed to FY profits largely above Wall Street expectations, underscoring resilient spending by its affluent customer base amid broader economic uncertainty, and Colgate-Palmolive delivered Q4 earnings and revenues that exceeded analyst expectations, despite taking a hit from an impairment charge related to its skin health unit.

Elsewhere, the Wall Street Journal reported that Amazon was allegedly in talks to invest up to $50bn in OpenAI, while Reuters revealed that Elon Musk was said to be considering merging SpaceX with either Tesla Motors or xAI as he looks to consolidate his sprawling tech empire.

On the macro front, producer prices rose more than expected in December, according to the Bureau of Labor Statistics, with headline PPI for final demand up 0.5% monthonmonth. December's increase followed upticks of 0.2% in November and 0.1% in October. On an unadjusted basis, final demand prices increased 3.0% over 2025, easing from 3.5% in 2024. Core PPI, which strips out volatile food, energy and trade services costs, climbed 0.4% in December - marking an eighth straight monthly increase. On an annualised basis, core prices were up 3.5%, compared to a 3.6% rise in 2024.

On another note, the Chicago Business Barometer jumped to 54 in January, according to the Institute for Supply Management, up from 42.7 in December and comfortably beating expectations for 44. January's reading also signaled a return to growth after 25 straight months of contraction.

Reporting by Iain Gilbert at Sharecast.com