{"id":61856,"date":"2026-05-12T12:38:28","date_gmt":"2026-05-12T16:38:28","guid":{"rendered":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/market-volatility-spikes-as-warsh-joins-fed-and-uk-leadership-crumbles-rumors-of-1t-us-china-deal-surface\/61856\/"},"modified":"2026-05-12T12:38:28","modified_gmt":"2026-05-12T16:38:28","slug":"market-volatility-spikes-as-warsh-joins-fed-and-uk-leadership-crumbles-rumors-of-1t-us-china-deal-surface","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/market-volatility-spikes-as-warsh-joins-fed-and-uk-leadership-crumbles-rumors-of-1t-us-china-deal-surface\/61856\/","title":{"rendered":"Market Volatility Spikes as Warsh Joins Fed and UK Leadership Crumbles; Rumors of $1T US-China Deal Surface"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"#\" data-href=\"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/market-volatility-spikes-as-warsh-joins-fed-and-uk-leadership-crumbles-rumors-of-1t-us-china-deal-surface\/61856\/#Key_Takeaways\" >Key Takeaways<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"#\" data-href=\"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/market-volatility-spikes-as-warsh-joins-fed-and-uk-leadership-crumbles-rumors-of-1t-us-china-deal-surface\/61856\/#Fed_Leadership_Transition_and_Market_Reaction\" >Fed Leadership Transition and Market Reaction<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"#\" data-href=\"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/market-volatility-spikes-as-warsh-joins-fed-and-uk-leadership-crumbles-rumors-of-1t-us-china-deal-surface\/61856\/#UK_Government_on_the_Brink\" >UK Government on the Brink<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"#\" data-href=\"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/market-volatility-spikes-as-warsh-joins-fed-and-uk-leadership-crumbles-rumors-of-1t-us-china-deal-surface\/61856\/#Geopolitical_Tensions_and_Trade_Rumors\" >Geopolitical Tensions and Trade Rumors<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"#\" data-href=\"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/market-volatility-spikes-as-warsh-joins-fed-and-uk-leadership-crumbles-rumors-of-1t-us-china-deal-surface\/61856\/#Energy_and_Commodities_Outlook\" >Energy and Commodities Outlook<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"#\" data-href=\"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/market-volatility-spikes-as-warsh-joins-fed-and-uk-leadership-crumbles-rumors-of-1t-us-china-deal-surface\/61856\/#Tech_Innovation_and_Corporate_Moves\" >Tech Innovation and Corporate Moves<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Key_Takeaways\"><\/span>Key Takeaways<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<ul>\n<li><strong>Kevin Warsh confirmed to the Federal Reserve Board of Governors<\/strong> in a <strong>51-45 Senate vote<\/strong>, clearing his path to succeed <strong>Jerome Powell<\/strong> as Chair by the end of the week.<\/li>\n<li><strong><a href=\"https:\/\/stockmarketwatch.com\/indices\/sp500\/today\" data-internallinksmanager029f6b8e52c=\"3\" title=\"snp500 today\">S&amp;P 500<\/a> slides 1%<\/strong> as UK political instability reaches a fever pitch with multiple ministerial resignations and Home Secretary <strong>Shabana Mahmood<\/strong> placed on &quot;resignation watch.&quot;<\/li>\n<li><strong>Rumors of a $1 trillion Chinese investment deal<\/strong> in the U.S. emerge ahead of President Trump\u2019s high-stakes visit to Beijing, potentially reshaping global trade dynamics.<\/li>\n<li><strong>EIA projects Brent crude to peak at $115 per barrel<\/strong> in Q2 2026, citing the prolonged closure of the <strong>Strait of Hormuz<\/strong> and significant Middle East production shut-ins.<\/li>\n<li><strong>Alphabet&#39;s Google (<a href=\"\/stock\/GOOGL\">GOOGL<\/a>) and SpaceX<\/strong> are reportedly in talks to develop <strong>orbital data centers<\/strong>, a move aimed at scaling AI computing via space-based infrastructure.<\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Fed_Leadership_Transition_and_Market_Reaction\"><\/span>Fed Leadership Transition and Market Reaction<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The <strong>U.S. Senate<\/strong> officially confirmed <strong>Kevin Warsh<\/strong> to the <strong>Federal Reserve Board of Governors<\/strong> today with a <strong>51-45 vote<\/strong>. This confirmation is the first of two critical steps to install Warsh as the next Fed Chair, replacing <strong>Jerome Powell<\/strong>, whose term as chairman expires this Friday. While Powell intends to remain on the board as a governor to oversee the conclusion of ongoing investigations, the transition marks a significant shift toward the Trump administration&#39;s preferred monetary policy direction.<\/p>\n<p>Broader markets reacted with caution as the <strong>S&amp;P 500 fell 1%<\/strong>, exacerbated by a <strong>Cleveland Fed CPI<\/strong> reading for April that ticked up to <strong>0.4%<\/strong> from 0.2% the previous month. European markets saw steeper declines, with Germany&#39;s <strong>DAX<\/strong> dropping <strong>1.54%<\/strong> and Spain&#39;s <strong>IBEX<\/strong> falling <strong>1.53%<\/strong>. <em>Investors appear to be weighing the impact of central bank turnover against a backdrop of persistent inflation and heightening geopolitical risks.<\/em><\/p>\n<h2><span class=\"ez-toc-section\" id=\"UK_Government_on_the_Brink\"><\/span>UK Government on the Brink<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The premiership of <strong>Sir Keir Starmer<\/strong> is facing its most severe challenge yet as a &quot;civil war&quot; within the <strong>Labour Party<\/strong> intensifies. Junior Health Minister <strong>Zubir Ahmed<\/strong> resigned today, joining <strong>Miatta Fahnbulleh<\/strong>, <strong>Jess Phillips<\/strong>, and <strong>Alex Davies-Jones<\/strong> in a wave of departures calling for Starmer to step aside. Ahmed\u2019s resignation letter cited a &quot;lack of values-driven leadership&quot; and claimed the public has &quot;irretrievably lost confidence&quot; in the current government following disastrous local election results.<\/p>\n<p>Speculation is mounting over a potential leadership bid by <strong>Wes Streeting<\/strong>, as allies of Home Secretary <strong>Shabana Mahmood<\/strong> refuse to rule out her resignation tonight. <em>The political vacuum in London has added a layer of uncertainty to European equities, with the FTSE 100 closing down 0.15% as traders monitor the stability of the British government.<\/em><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Geopolitical_Tensions_and_Trade_Rumors\"><\/span>Geopolitical Tensions and Trade Rumors<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Reports have surfaced that <strong>President Trump<\/strong> and <strong>Xi Jinping<\/strong> are considering a landmark deal that would allow China to invest <strong>$1 trillion<\/strong> in the U.S., primarily to build manufacturing plants on American soil. This potential agreement comes as Trump prepares for his first official trip to China since 2017. However, the deal faces internal opposition, with <strong>Rep. Ro Khanna<\/strong> warning that subsidized Chinese factories for cars and steel would be a &quot;disaster for American workers.&quot;<\/p>\n<p>In the Middle East, <strong>Iran<\/strong> has reportedly set five strict conditions for entering nuclear talks, including the lifting of all sanctions and <strong>$270 billion in war reparations<\/strong>. Tensions remain high as <strong>Kuwait<\/strong> summoned Iran\u2019s ambassador following alleged <strong>IRGC<\/strong> infiltration of <strong>Bubiyan Island<\/strong>. <em>The fragile ceasefire in the region is described by some officials as being &quot;on life support,&quot; keeping energy markets on edge.<\/em><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Energy_and_Commodities_Outlook\"><\/span>Energy and Commodities Outlook<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The <strong>EIA<\/strong> released its <strong>Short-Term Energy Outlook (STEO)<\/strong> today, raising its <strong>2026 Brent price average to $94.85\/bbl<\/strong>, with a projected peak of <strong>$115\/bbl<\/strong> this quarter. The agency assumes the <strong>Strait of Hormuz<\/strong> will remain effectively closed until late May, leading to global inventory draws of <strong>2.6 million bpd<\/strong> this year. Meanwhile, U.S. oil production is expected to average <strong>13.73 million bpd<\/strong> in May, a slight decrease from April levels.<\/p>\n<p>In agriculture, the <strong>USDA&#39;s WASDE<\/strong> report revealed tighter-than-expected supplies for key crops. <strong>Soybean end stocks<\/strong> were reported at <strong>310 million bushels<\/strong>, significantly below the estimated <strong>350 million<\/strong>, while <strong>wheat stocks<\/strong> fell to <strong>762 million bushels<\/strong> against an 850 million estimate. <em>These supply constraints are expected to maintain upward pressure on food commodity prices through the summer months.<\/em><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Tech_Innovation_and_Corporate_Moves\"><\/span>Tech Innovation and Corporate Moves<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><strong>Alphabet&#39;s Google (<a href=\"\/stock\/GOOGL\">GOOGL<\/a>)<\/strong> is in discussions with <strong>SpaceX<\/strong> regarding a rocket launch deal to support the deployment of <strong>orbital data centers<\/strong>. This initiative, part of <strong>Project Suncatcher<\/strong>, seeks to utilize solar power in orbit to run AI computing systems, bypassing terrestrial energy and regulatory hurdles. <strong>Nvidia (<a href=\"\/stock\/NVDA\">NVDA<\/a>)<\/strong> is also reportedly exploring similar &quot;space-fiction&quot; infrastructure projects to support its next-generation AI chips.<\/p>\n<p>In the automotive sector, <strong>Volkswagen (<a href=\"\/stock\/VWAGY\">VWAGY<\/a>)<\/strong> announced plans to request binding bids for <strong>Everllence SE<\/strong> in early June as part of its ongoing portfolio restructuring. Additionally, <strong>Eiffage (EIF.PA)<\/strong> reported Q1 2026 revenue of <strong>EUR 5.65 billion<\/strong>, slightly missing estimates but confirming its full-year outlook with a robust order book of <strong>EUR 31.1 billion<\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways Kevin Warsh confirmed to the Federal Reserve Board of Governors in a 51-45 Senate vote, clearing his path 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