Why Stock Markets Fell This Week: Gold Crash and Fed Policy Shifts Trigger Broad Selloff

U.S. stock markets experienced a broad decline last week, with the S&P 500 retreating 0.43% to 6,939.03, the Nasdaq Composite sliding 0.94% to 23,461.82, and the Dow Jones Industrial Average slipping 0.36% to 48,892.47. But beneath these headline numbers lies a fascinating story about what’s really shaking up markets today. The sharp stock market down movement across major indices reflects deeper shifts in investor sentiment driven by precious metals volatility and shifting Federal Reserve expectations.

The Precious Metals Collapse Sparked the Market Downturn

The catalyst for last week’s equity weakness came from an extraordinary collapse in gold and silver prices. Silver experienced its most dramatic single-day plunge on record, losing more than 35% in intraday trading before stabilizing. Gold futures tumbled 11% earlier in the session, though recovered somewhat by the close. This stunning reversal came after precious metals had soared throughout 2025, setting successive all-time highs.

The trigger for this stock market down reversal involves broader economic policy signals. News of President Trump’s intention to nominate Kevin Warsh as Federal Reserve chair rattled precious metals investors. Market participants interpreted Warsh’s expected nomination as a signal toward less accommodative monetary policy. Historically, Warsh has advocated for tighter rates and less dovish positioning, which typically pressures gold and silver prices but can strengthen the U.S. dollar. Indeed, the dollar rallied substantially last week, reflecting this policy shift anticipation.

Divergent Performances Across Sectors

Within the stock market down environment, different sectors showed markedly different reactions. Precious metals stocks and financial-focused equities led the broader decline, predictably given the gold and silver crash. Certain defensive positions found safe harbor—Walmart and Coca-Cola posted modest gains despite the selloff, providing investors with reassuring stability in consumer staples.

Technology stocks demonstrated resilience after a challenging week of earnings reports. Microsoft limited losses to just 0.74% despite the broader market pressure, while Apple actually gained 0.46% to reach $259.48 following solid after-hours earnings results yesterday. Yet broader tech sentiment remains fragile. The Nasdaq’s outsized decline reflected lingering skepticism about artificial intelligence’s profitability timeline following recent megacap earnings disappointments.

Healthcare and Structural Headwinds

Beyond Fed policy expectations, healthcare equities faced independent pressure from government proposals to impose rate caps on Medicare Advantage plans. This structural threat represents a separate drag on that sector, distinct from the broader stock market down dynamic driven by precious metals and monetary policy signals.

Understanding why the stock market fell last week requires connecting multiple threads: the extraordinary precious metals reversal, changing Federal Reserve leadership prospects, cooling enthusiasm for mega-cap technology investments, and sector-specific regulatory headwinds. Each contributed to the overall decline, demonstrating how interconnected modern financial markets have become.