By Sophie Kiderlin and Rae Wee LONDON, Jan 16 (Reuters) - Global stocks hovered near record peaks on Friday, as international tensions simmered and the dollar held near a six-week high as traders
Stocks Decline Weekly Amid Uncertainty Over Hassett's Fed Position
Market Overview and Key Developments
By Isla Binnie and Sophie Kiderlin
Stock Market Performance
Jan 16 (Reuters) - Wall Street indexes ended with modest weekly losses on Friday in spite of strong earnings in tech and banking, while the U.S. dollar stood firm near a six-week high as President Donald Trump suggested he might not name his expected candidate, a rate-cutting advocate, as Federal Reserve chair.
Currency and Commodity Trends
Gold slowed after a roaring ride on safe haven demand. Oil prices, however, rose as traders covered short positions ahead of a long weekend in the U.S. and continued to fret about supply risks even after Trump dialed down talk of intervening to address a government crackdown on protests in Iran.
Investor Reactions to Economic News
Just two full trading weeks into 2026, investors have been presented with a global maelstrom, including Trump's intervention in Venezuela, stated desire to take over Greenland and threat to indict Fed chair Jerome Powell, which raised worries about central bank independence.
U.S. indexes turned lower for a time and Treasury yields ticked up after Trump said he may want to keep economic adviser Kevin Hassett in his current role, eroding expectations that Hassett would succeed Fed Chair Jerome Powell.
The Dow Jones Industrial Average fell 83.11 points, or 0.17%, to 49,359.33, the S&P 500 lost 4.46 points, or 0.06%, to 6,940.01 and the Nasdaq Composite lost 14.63 points, or 0.06%, to 23,515.39.
For the week, the S&P 500 was down 0.38%, the Nasdaq declined 0.66% and the Dow fell 0.29%.
Anthony Saglimbene, chief market strategist at Ameriprise Financial, said one reason markets were "flat-lining" was anticipation of more earnings releases.
"To finish the week around flat with the S&P 500 still within spitting distance of 7,000 - most investors will take that as a win two weeks into the year," Saglimbene said.
SEARCH FOR VALUE
Stock traders rediscovered their enthusiasm for AI this week after strong results from chipmaker TSMC, even as some buyers switched out of heavyweight tech names into smaller cap stocks on the hunt for value.
The financials sector was down on the week, partly due to a proposal from Trump to cap credit card interest rates. That jostled with strong quarterly earnings from big U.S. banks which gave some positive signs for the broader economy.
Consumer staples, real estate and utilities - all sectors less susceptible to downturns, performed better.
Netflix, Johnson & Johnson and Intel are among the household names reporting next week.
"I WOULD LOSE YOU"
Hassett, who has echoed Trump's calls for lower interest rates, had been seen as the front-runner for the Fed chair. Analysts have questioned whether his appointment to the Fed would undercut the independence that shields it from short-term political pressures.
"Kevin Hassett is so good. I'm saying, 'Wait a minute, if I move him -- these Fed guys, certainly the one we have now, they don't talk much.' I would lose you. It's a serious concern to me," Trump said at a White House event.
Betters on Polymarket pushed the odds of former Fed Governor Kevin Warsh becoming the next Fed chair to 57% from 44%.
U.S. Treasury yields moved higher after Trump's remarks. The yield on benchmark U.S. 10-year notes was last seen up 6.7 basis points to 4.227%, from 4.16% late on Thursday.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro,rose 0.03% to 99.38, with the euro down 0.05% at $1.1599.
The index had reached a six-week high on Thursday, helped by unexpectedly strong jobs data which pushed off the prospect of further interest rate cuts.
Markets are betting on a 20% chance of a rate cut in March, down from roughly 50% a month ago.
The yen also strengthened after Japan's Finance Minister Satsuki Katayama said Tokyo would not rule out any options to counter weakness in the currency.
LINGERING IRAN RISK
Oil prices rose as traders covered themselves by buying crude ahead of a weekend which is longer in the U.S. due to Martin Luther King Jr. Day on Monday.
Some concerns lingered about risk to oil supply in the wake of unrest in Iran, despite receding prospects of U.S. intervention there. Potential supply increases from Venezuela weighed against those fears. [O/R]
Brent crude settled at $64.13 a barrel, up 37 cents or 0.58%. U.S. West Texas Intermediate finished at $59.44 a barrel, up 25 cents, or 0.42%.
Gold gave up its spot as the biggest trade in town as investors booked profits and demand waned for safe havens.
It fell more than 1% before recovering some ground to be quoted 0.44% to $4,593.28 an ounce. It is still set for its second consecutive weekly gain.
(Reporting by Isla Binnie, Sophie Kiderlin in London and Rae Wee in Singapore; Editing by Dhara Ranasinghe, Andrew Heavens, Susan Fenton, Aurora Ellis and Cynthia Osterman)
