US futures and Asian shares slip as worries over Trump's Fed chief pick and AI weigh on markets

U.S. futures and Asian shares skidded on Monday as worries over President Donald Trump’s nominee to be the next Federal Reserve chair amplified jitters over a possible bubble in the artificial intelligence boom.

South Korea’s exchange, which is heavily influenced by tech-related developments, briefly suspended trading as its benchmark Kospi dropped 5.1%, to 4,958.51. Samsung Electronics gave up 5.6%, while chip maker SK Hynix sank 7.6%.

The Kospi has been forging records for weeks as big tech companies piggybacked on the AI craze with deals with major players like chip maker Nvidia and OpenAI.

Markets also took a hit as investors considered how Kevin Warsh, Trump’s new nominee to lead the Federal Reserve, might handle interest rates. The future for the S&P 500 sank 1.2% while that for the Dow Jones Industrial Average fell 0.8%.

A fear in financial markets has been that the Fed will lose some of its independence because of Trump. That fear in turn helped catapult the price of gold and weaken the U.S. dollar’s value over the last year.

Early Monday, the price of gold fell 3.5%, while silver dropped 2.1%. Both plunged Friday as record runs in precious metals markets ground to a halt.

U.S. benchmark crude lost $3.46 to $61.75 per barrel. Speaking to reporters aboard Air Force One, Trump said Iran should negotiate a “satisfactory” deal to prevent the Middle Eastern country from getting any nuclear weapons.

“I don’t know that they will. But they are talking to us. Seriously talking to us,” he said.

That comment apparently assuaged some worries over potential disruptions to oil supplies that had pushed prices higher, analysts said. Brent crude fell $3.58 to $65.74 per barrel.

In Tokyo, the Nikkei 225 gave up early gains, sinking 1% to 52,791.59.

Hong Kong's Hang Seng dropped 2.9% to 26,580.78, while the Shanghai Composite index sank 1.8% to 4,043.68.

In Australia, the S&P/ASX 200 fell 1% to 8,778.60.

Taiwan's Taiex lost 1.4%.

On Friday, the S&P 500 dropped 0.4% to 6,930.03. The Dow lost 0.4% to 48,892.47 and the Nasdaq composite lost 0.9% to 23,461.82.

Helping to limit the market’s losses was Tesla, which rose 3.3%. It bounced back after dropping on Thursday despite delivering better profit reports for the latest quarter than analysts expected.

Apple added 0.5% after the iPhone maker reported a stronger profit for the latest quarter than analysts expected.

Warsh's nomination requires Senate approval. Whoever leads the Fed has a big influence on the economy and markets worldwide by helping to dictate where the U.S. central bank moves interest rates. Such decisions lift or weigh on prices for all kinds of investments, as the Fed tries to keep the U.S. job market humming without letting inflation get out of control. Trump has been pushing for lower interest rates, which usually help goose the economy but can also cause higher inflation.

A report released Friday showed U.S. inflation at the wholesale level was hotter last month than economists expected. That could put pressure on the Fed to keep interest rates steady for a while instead of cutting them, as it did late last year.

The longtime assumption has been that the Fed should operate separately from the rest of Washington so that it can make moves that are painful in the short term but necessary for the long term. To get inflation down to the Fed’s goal of 2%, for example, may require the unpopular choice to keep interest rates high and grind down on the economy for a while.

On Wall Street, stocks of metals miners tumbled as the price of gold dropped 11.4% to settle at $4,745.10 per ounce. Gold’s price suddenly ran out of momentum following a tremendous rally where it roughly doubled over 12 months. It topped $5,000 for the first time on Monday and was around $5,600 at one point on Thursday.

Silver, which had been on a similar, jaw-dropping tear, plunged 31.4%.

In other action early Monday, the dollar fell to 154.81 Japanese yen from 154.94 yen. The euro slipped to $1.1851 from $1.1853.