“There’s a ripple effect in equities, but you’re seeing kind of a change in mindset when it comes to where equity investors are looking for leadership,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors.The selloff in metals intensified last week after U.S. President Donald Trump nominated Kevin Warsh as the next Federal Reserve chairman to replace Jerome Powell in May, a move that investors largely saw as aggressive.
At 9:46 a.m. Dutch time, the Dow Jones Industrial Average rose 0.48% to 49,129.46. The S&P 500 gained 0.14% to 6,948.69, while the Nasdaq Composite lost 0.07% to 23,447.57.
The volatility VIX index rose to 17.45, hovering around a two-week high after last week’s choppy period, driven by mixed megacap gains and increased policy uncertainty following Warsh’s appointment.
Energy company shares fell, following a drop in oil prices after Trump said Iran was in “serious discussions” with Washington, signaling de-escalation and allaying concerns about supply disruption. Exxon Mobil and Chevron each fell 1.6%. The S&P Energy index fell the most, down 1.8%.
Rare earth miners and crucial minerals gained after Bloomberg News reported that the Trump administration has launched a $12 billion mineral stockpile to counter China.
Tech megacaps fell, with Nvidia and Tesla down more than 2% each. Meta lost 1.1%.
However, Microsoft shares rebounded on Friday from their worst week since March 2020 after cloud revenues disappointed. This underlines investors’ growing sensitivity to lofty investment plans and the pressure on Big Tech to justify record spending with meaningful returns.
“You’re seeing investors becoming more selective… and you’re seeing companies starting to warn a little bit about earnings, or investors maybe reassessing their growth expectations,” Baird said.
Disney fell 6% despite reporting first-quarter earnings above Wall Street expectations.
The markets are heading into another busy week of tech earnings, with 128 of the S&P 500 companies on deck to report, including Alphabet, Amazon and AMD.
Focus will also be on JOLTS, ADP hiring and nonfarm payrolls, along with PMI figures, due out this week.
Meanwhile, the US entered a brief shutdown on Saturday after Congress failed to pass a deal to keep many operations funded.
The House of Representatives has passed legislation to lift the partial shutdown. A final vote is expected on Tuesday.
As geopolitical flare-ups led to sell-offs in January, all three indexes posted gains, with the S&P crossing the 7,000-point mark for the first time. The index also reached record levels earlier this month, supported by resilient profits and continued appetite for AI-driven growth.
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