Wall Street remained in a fine decline – the election of the Fed leader took a new turn

On Wall Street, the main stock indices fell slightly on Friday.

The industrial company index Dow Jones weakened by 0.2 percent. The S&P 500 stock index, which tracks large companies, and the technology-focused Nasdaq both fell 0.1 percent.

On the other hand, the small company index Russell 2000 rose by 0.1 percent.

Interest rates on US government bonds turned to a gentle rise. The interest rate rises when investors sell their holdings. The reason behind the rise was the market’s suspicion that the US president Donald Trump may prefer a more hawkish candidate to lead the Fed.

Trump said Friday that he would like to keep the White House head of the National Economic Council Kevin Hassettin in its current role. Hassett has been considered the strongest candidate for the current head of the Fed Jerome Powell successor.

Another strong one candidate is a former member of the Fed’s executive board Kevin Warsh. He is generally seen as more hawkish than Hassett – in other words, Warsh’s appointment could mean tighter monetary policy. Under Warsh’s leadership, the Fed may not lower its key interest rate as expected. Trump has long been calling for more aggressive interest rate cuts.

Next week, the market will be watching not only the Fed saga but also the earnings season. They publish their results, among other things Netflix, United Airlines and Johnson & Johnson.

“Investors’ main attention is focused on comments about the outlook, especially on the development of earnings per share (EPS) in 2026 and beyond,” writes The cutting particle strategist Drew Pettit According to investment magazine Barrons.

Markets in the US are closed on Monday for Martin Luther King Jr. Day.