Overview of What’s News in Markets: Fed Chair, Layoffs, Meme Stock
This episode (The Wall Street Journal, hosted by Crystal Herr; Saturday, Jan. 31) reviews the week’s biggest market moves and the news behind them: a consequential Fed nomination and policy signal, fresh rounds of corporate layoffs, sharp volatility in gold and silver, a tech-driven selloff after Microsoft’s earnings, and GameStop’s new strategic ambitions.
Markets snapshot
- Major U.S. indexes (weekly): S&P 500 +0.3% (only major index up), Dow Jones -0.4%, Nasdaq -0.2%.
- Notable volatility: gold and silver experienced extreme swings—gold jumped to a multiweek record earlier in the week then plunged, recording a one-day drop of more than 11%; silver fell about 31% in a single session. The episode notes both metals saw their largest one-day percentage declines since 1980.
- Tech pain point: disappointing Microsoft earnings triggered a broad tech selloff; Microsoft lost billions in market value, recording its largest single-day drop on record and the second-largest one-day market-cap decline for any U.S. company.
Federal Reserve: nomination and policy signal
- President Trump nominated former Fed governor Kevin Warsh to be Fed chair after Jerome Powell’s term ends in mid-May.
- Background on Warsh: served on the Fed Board of Governors from 2006–2011 and played roles during the financial crisis; has been viewed as an inflation hawk historically but has more recently signaled openness to faster rate cuts.
- Fed action and tone: the Fed held rates steady and signaled it’s in no rush to cut rates.
- Next steps/risks: Warsh would need Senate confirmation; the episode notes potential complications from a Justice Department probe related to the Fed.
Corporate layoffs and labor trends
- Theme: companies that expanded rapidly during the pandemic are trimming headcount to reduce costs.
- Major announced cuts this week:
- Amazon: an additional 16,000 corporate layoffs (on top of ~14,000 last fall) — roughly 10% of Amazon’s corporate workforce.
- UPS: expects to cut about 30,000 jobs this year, following ~48,000 cuts last year.
- Pinterest: plans to shrink its workforce by up to 15%.
- Market reaction (weekly): Amazon shares roughly flat (+<0.1%), UPS -1.6%, Pinterest -15%.
Market movers & volatility — Microsoft, gold, broader tech
- Microsoft: earnings disappointed investors, prompting a broad tech selloff. The company’s large intraday market-cap fall ranked among the biggest single-day declines for a U.S. company. The selloff fed skepticism about the near-term returns on large AI infrastructure investments.
- Precious metals: dramatic intraday swings in gold and silver produced rare, large single-day declines—highlighting stressed positioning and a sharply risk-off response from leveraged/ETF flows.
GameStop’s plan and investor support
- CEO Ryan Cohen told The Wall Street Journal he aims to transform GameStop into a broader consumer/retail company and is exploring a major acquisition of a public company (likely consumer/retail) to diversify beyond video games and collectibles.
- Activist/investor interest: Michael Burry disclosed increasing his GameStop position and said significant upside exists if Cohen completes a large (roughly $10 billion+) acquisition.
- Shares: GameStop is down about 80% from its meme-stock highs in 2021; closed around $24 on Friday, up ~4% for the week. Five years ago this week the stock peaked near $121.
Key takeaways and what to watch next
- Fed leadership and guidance matter: a new chair and the Fed’s “no rush to cut” stance could influence interest rates, markets, and borrowing costs for businesses and consumers. Watch the Senate confirmation process and Fed communications.
- Layoffs are not finished: large corporates continue to cut; this affects consumer demand, hiring markets, and sectoral performance—monitor further announcements from big tech, logistics, and retail.
- Volatility can be abrupt: the sharp moves in gold/silver and tech show how quickly positioning and sentiment can reverse; keep an eye on flows into ETFs and margin/leveraged products.
- M&A as a turnaround lever: GameStop’s plan underscores how acquisitions can materially change a company’s prospects and attract activist/supportive investors—track any deal announcements and financing terms.
Episode details
- Host: Crystal Herr
- Date: Saturday, January 31
- Produced by: Michael LaValle; supervising producer Melanie Roy; Jana Heron.