DXY index and VIX surge as markets await U.S. Open

The Trump administration is reportedly preparing to announce Kevin Warsh as the next Federal Reserve chair on Friday, replacing Jerome Powell, a development that has unsettled markets and triggered a broad selloff across asset classes.

As a result risk sentiment has deteriorated as investors price in potential shifts in monetary policy direction.

Meanwhile, the DXY index, which tracks the strength of the U.S. dollar against a basket of major currencies, has edged up to 96.6.

U.S. Treasury yields are modestly higher, with the 10 year benchmark yield at approximately 4.25%.

Volatility has surged with the Volatility Index (VIX) up 13% and the MOVE Index, which tracks volatility in the U.S. Treasury market, higher by 6%.

In Friday pre-market trading, the Invesco QQQ (QQQ) is down more than 1%, trading around $622 per share.

Bitcoin has fallen significantly, sliding to $82,000. As a result of this drop, bitcoin has fallen out of the top ten global assets by market capitalization and now ranks eleventh, with a market cap of $1.6 trillion.

Equities tied to bitcoin have followed suit. Strategy (MSTR), the largest publicly traded holder of bitcoin, is down 4% in pre market trading after falling roughly 10% on Thursday, now trading near $138. In the bitcoin mining and AI sector, IREN (IREN) is down 5% at $57, while Cipher Mining (CIFR) is lower by 4%. While both Galaxy Digital (GLXY) and Coinbase (COIN) are down 3%.

Metals have absorbed much of the downside during the last 24 hours. Gold has retreated toward $5,000 per ounce, while silver has fallen back to around $100 per ounce. Other commodities have also weakened, with copper and oil both trading lower.