The S&P 500 was set to open 0.7% lower after sliding as much as 1.5%. Gold headed for its steepest three-day drop since 1980 as a record-breaking rally unraveled at breakneck speed. Silver extended losses to 40% over the same period.

Treasuries posted modest gains, with the 10-year yield falling two basis points to 4.22%. The dollar held onto Friday’s gains. Bitcoin steadied near $77,0000 following a weekend selloff.

“Markets are nervous,” said Ulrich Urbahn, head of multi-asset strategy and research at Berenberg. “We see a broad selloff across markets in Asia, Europe and the US. With the volatility increase in gold, but also in silver, investors have to de-risk.”

The MSCI All Country World Index fell 0.5% as the Asian benchmark slid 2.1%. South Korea’s Kospi — a bellwether for the AI sector — plunged 5.3%. Losses in European stocks were more muted.

Monday’s price action points to mounting instability after a prolonged rally in metals and successive record highs in equities, driven by billions in AI investment. At the same time, investors are reassessing valuations and recalibrating expectations for monetary policy under a potential Warsh-led Fed.

With the pick of Warsh — an economist known as much for his fierce criticism of the central bank as his views on monetary policy — the debate has abruptly shifted from short-term rates to the Fed’s $6.6 trillion balance sheet and its very role in markets.

If confirmed by the Senate, the former Fed governor will succeed Jerome Powell when his term ends in May. Warsh, 55, aligned himself with Trump in 2025 by arguing publicly for lower rates, going against his longstanding reputation as an inflation hawk. The US president said Friday he had not asked Warsh to commit to cuts.

“Investors are worried about ‘higher for longer,’” Francis Tan, Asia chief strategist at Indosuez, said about US interest rates. “However, the market’s confusion is whether Trump will add pressure to send more doves the market’s way via Warsh. This causes the volatility across asset classes and geographies.”Play Video

Losses in tech came after Nvidia Corp. Chief Executive Officer Jensen Huang said the company’s proposed $100 billion investment in OpenAI was “never a commitment” and that the company would consider any funding rounds “one at a time.” 

“Jensen’s comments likely had a near‑term sentiment impact, particularly on AI‑exposed names that have rallied strongly,” said Gary Tan, a portfolio manager at Allspring Global Investments. “The remarks primarily served as a profit‑taking catalyst as we see some unwinding of crowded trades across the market.”

In political news, the US government stumbled into a partial shutdown Saturday while waiting for the House to approve a funding deal Trump worked out with Democrats following a national uproar over Border Patrol agents’ killing of a US citizen in Minneapolis.

Brent crude oil plunged as much as 7.4%, while copper slumped more than 5%.

“Sentiment has turned defensive – but this is mainly risk trimming – not so much panic,” said Billy Leung, an investment strategist at Global X Management. “Overall sentiment is weak.”