U.S. equity futures edged lower on Friday as investors assessed growing speculation that Kevin Warsh could be named the next chair of the U.S. Federal Reserve. Corporate news provided some support, led by a strong earnings update from Apple, while precious metals pulled back from record highs. Meanwhile, political risk eased after signs emerged that a U.S. government shutdown has likely been avoided.
Apple delivers standout quarter and upbeat outlook
Apple (NASDAQ:AAPL) reported results that comfortably exceeded expectations for both revenue and profit in its fiscal first quarter, which includes the key holiday period. The group posted its strongest quarterly iPhone sales growth in more than four years, with iPhone revenue surging 23.3% year on year to $85.27bn, the largest increase since the fourth quarter of 2021.
Demand has been particularly strong for the latest iPhone 17 range, especially higher-end Pro models, helping Apple lift its global smartphone market share to around 20% in 2025 from 18% a year earlier. The company also surprised on guidance, forecasting revenue growth of up to 16% for the March quarter, driven by sustained iPhone demand, a sharp recovery in China and accelerating momentum in India. Operating expenses are expected to come in between $18.4bn and $18.7bn, slightly higher than in the first quarter.
Despite the strong performance, Apple acknowledged ongoing supply-side challenges. “We’re currently constrained. And at this point, it’s difficult to predict when supply and demand will balance,” CEO Tim Cook said, adding, “we’re seeing less flexibility in supply chains than normal, partly because of our increased demand that I just spoke about.” The company, like many peers, continues to face tight availability of memory chips, which is weighing on production.
U.S. futures slip as investors turn cautious
U.S. stock futures traded lower as risk appetite softened ahead of the expected Fed announcement. By 03:25 ET, S&P 500 futures were down 55 points, or 0.8%, Nasdaq 100 futures had fallen 240 points, or 0.9%, and Dow futures were lower by around 400 points, or 0.8%.
Wall Street ended Thursday’s session mixed. The S&P 500 and the Nasdaq Composite closed lower, dragged down by weakness in technology stocks following earnings-related losses at Microsoft (NASDAQ:MSFT), while the Dow Jones Industrial Average edged modestly higher. For the week so far, the S&P 500 and Nasdaq are both up close to 0.8%, while the Dow is slightly negative.
Attention is also turning to another busy earnings day, with results due from Exxon Mobil (NYSE:XOM), Chevron (NYSE:CVX), American Express (NYSE:AXP), Verizon (NYSE:VZ), Regeneron Pharmaceuticals (NASDAQ:REGN) and Aon (NYSE:AON).
Kevin Warsh emerges as leading Fed contender
President Donald Trump said late Thursday that he will unveil his nominee to succeed Jerome Powell as Federal Reserve chair later in the session, fuelling speculation that former Fed governor Kevin Warsh is the frontrunner. “A lot of people think that this is somebody that could have been there a few years ago,” Trump said. “It’s going to be somebody that is very respected, somebody that’s known to everybody in the financial world.”
Those remarks have been widely interpreted as pointing to Warsh, who lost out to Powell for the role in 2017 during Trump’s first term. Reports from Reuters said Warsh visited the White House on Thursday, while both the Wall Street Journal and Bloomberg indicated the administration is preparing to nominate him.
Warsh is generally viewed as supportive of lower interest rates, aligning more closely with Trump’s policy preferences, but is also seen as a relatively moderate choice compared with some other names floated for the role. Trump has repeatedly criticised Powell for not cutting rates as aggressively as he wanted, a dispute that has raised concerns about central bank independence. Those concerns intensified earlier this month when Powell suggested that a criminal investigation into a Fed renovation project was politically motivated.
Shutdown risk eases after last-minute deal
Political uncertainty also eased after lawmakers reached a late-night agreement to prevent another U.S. government shutdown. The White House and Senate Democrats agreed to advance a large package of spending bills, while splitting out the Department of Homeland Security budget and funding that agency at current levels for an additional two weeks.
Saturday had been the deadline to pass five spending bills required to keep much of the government operating. The Trump administration previously endured a 43-day shutdown last autumn. Democrats had resisted backing DHS funding without changes to immigration enforcement tied to Trump’s mass deportation programme. The compromise is seen as buying time for further negotiations, particularly following renewed scrutiny of enforcement policies after the deaths of U.S. citizens Alex Pretti and Renee Good in Minneapolis.
Gold, silver and oil pull back from recent peaks
Precious metals retreated sharply after reaching record levels, as expectations of a less dovish Fed chair candidate boosted the U.S. dollar. Spot gold fell 3.1% to $5,184.26 an ounce, while April gold futures dropped 4.1% to $5,151.24 per ounce. Even after the pullback, gold remains up more than 20% so far in January, on track for a sixth consecutive monthly gain and its strongest monthly rise since 1982.
Other metals also cooled after a volatile week. Spot silver slid 7.3% to $106.073 an ounce after hitting a record high on Thursday, while platinum dropped 8.5% to $2,394.98 an ounce.
Oil prices eased following a three-day rally, though both benchmarks remained on course for strong weekly gains amid concerns that potential U.S. military action against Iran could disrupt supplies. Brent crude slipped 1.8% to $68.36 a barrel, while U.S. West Texas Intermediate fell 1.8% to $64.24. Both were still set to rise by more than 5% on the week.
OPEC and its allies, known as OPEC+, are due to meet on Sunday. Recent reports suggest the group is likely to keep output unchanged, having paused monthly production increases from January after raising supply by around 2.9 million barrels per day through 2025, a move that had previously weighed heavily on oil prices amid fears of oversupply and softer global demand.
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