MPC Morning Call 2nd February 2026 – Precious Metals hammered as Trump nominates Chair and Inflation numbers hot
Wall Street ended lower Friday as investors turned risk-averse in response to surprising inflation data, a historic sell-off in precious metals, and the nomination of Kevin Warsh as the next Federal Reserve chair by President Donald Trump.
WATCH ON YOUTUBE Wall Street ended lower Friday as investors turned risk-averse in response to surprising inflation data, a historic sell-off in precious metals, and the nomination of Kevin Warsh as the next Federal Reserve chair by President Donald Trump. The hot December producer price index (PPI) data came in well above forecasts, reinforcing concerns that inflation remains sticky and clouding expectations for near-term rate cuts. Meanwhile, a dramatic unwinding of the precious metals trade sent gold and silver prices crashing from record highs as traders locked in profits after weeks of soaring gains. Despite the gloomy end to the week, January still closed in positive territory for major indexes: the S&P 500 gained 1.4%, the Dow rose 1.7%, and the Nasdaq added 0.9%. However, market volatility persisted throughout the month, driven by shifting trade policies and geopolitical tensions under the Trump administration. Historical data showed February tends to be weak for the S&P 500, adding to the uncertainty as investors weigh whether early-year gains can hold. Analysts suggested that although January’s modest rise hinted at a positive year ahead, lingering inflation and political headwinds could keep markets uneasy. Trump’s nomination of former Fed Governor Kevin Warsh dominated headlines. Warsh, known for his relatively hawkish stance, previously served at the Fed from 2006 to 2011 and narrowly missed out on the chair role in 2017. His appointment signals both continuity and potential tension—he supports Trump’s push for lower rates but has also criticized the Fed’s long-standing monetary expansion. Analysts said his selection may reassure markets about the Fed’s independence, although the move underscored Trump’s continued dissatisfaction with current chair Jerome Powell. Elsewhere, Trump also endorsed a bipartisan spending deal aimed at averting a government shutdown, though its passage in Congress remained uncertain. In corporate news, Apple beat expectations for the holiday quarter, posting its strongest iPhone sales growth in more than four years, though shares slipped as other divisions underperformed. Verizon and Chevron both exceeded earnings forecasts, with the former signaling a strategic turnaround and the latter cutting costs amid lower crude prices. Meanwhile, gold suffered its worst session in decades, falling nearly 10%, while silver plunged almost 28% as investors rotated out of safe havens. Oil prices, however, steadied and were on track for weekly gains ahead of an OPEC+ meeting expected to maintain output levels. Overall, investors closed the week juggling inflation concerns, leadership changes at the Fed, and renewed geopolitical risks. Government Bond Yields Commodities, Energy & FX ASX Overnight: SPI 8767 (-0.67%) The Day Ahead: The ASX will open with a panic in precious metals, which will drag down the index. This is likely a buying opportunity, especially in the miners. The day ahead GrainCorp has guided FY6 underlying earnings before interest, taxes, depreciation, and amortisation to be in the range of $200 million to $240 million, down from $308 million in FY25, and underlying net profit after tax of $20 million to $50 million, compared with $87 million a year before. Resignation of CTD and DYL long term chairs
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