U.S. stocks are down but off session lows after President Donald Trump said he's choosing former Federal Reserve Governor Kevin Warsh as his nomination to be the next Fed chair.

Warsh, currently a fellow at the Hoover Institution and a lecturer at Stanford Graduate School of Business, would need to be confirmed by the Senate to replace Jerome Powell at the top of the Fed when his term expires in May. Warsh beat out BlackRock executive Rick Rieder, current Fed Governor Christopher Waller and current National Economic Council Director Kevin Hassett for the nomination and is seen as the most \\"hawkish\\" of the group.

Hawks are vigilant on inflation so they tend to favor higher interest rates to fight it compared with \\"doves\\" who generally prefer lower rates to boost economic growth.

Warsh's nomination eliminates the uncertainty of Trump's pick for the next Fed chair but his confirmation still isn't a sure bet. Sen. Thom Tillis, R-North Carolina, said he'll oppose Warsh's confirmation until the federal criminal probe of current Fed Chair Jerome Powell's handling of renovations at the Fed headquarters is resolved.

Stocks, which normally thrive in a low-rate environment, also are weighing the pros and cons of a possible hawk at the helm who may be reluctant to slash rates as Trump has repeatedly demanded.

\\"(Warsh) has historically been on the hawkish side of monetary policy, and while he will naturally look to stay on Trump’s good side, this should help temper any expectation that the Fed will begin indiscriminately lowering interest rates when he takes the job,\\" said Stuart Clark, portfolio manager at Quilter.

Ultimately, Clark said, Warsh's appointment is \\"likely to calm markets, which had of late started to get more volatile.\\"

Mark Malek, chief investment officer at Siebert Financial, said Warsh as Fed chair could prevent a market meltdown if investors believe an artificial intelligence bubble has been brewing.

\\"A Fed with a monetarist at the helm will clamp down the filter on even the most spend-happy AI players, leaving us only with the ones who can afford it. Was a bubble just avoided?\\" he said.

At 11:05 a.m. ET on Jan. 30, the broad S&P 500 was down 0.37%, or 26.04 points, to 6,942.97 while the blue-chip Dow lost 0.58%, or 285.48  points, to 48,786.08. The tech-heavy Nasdaq shed 0.52%, or 123.883 points, to 23,561.237.

The benchmark 10-year Treasury yield ticked up to 4.249%.

\\"Yields moved higher because the bond market, always faster on the uptake than equities, immediately priced in a lower probability of aggressive easing,\\" Malek said.

Gold prices have climbed to record levels this year amid geopolitical and economic uncertainty. The U.S. economy has shown a slowdown in job growth, and inflation continues above the Fed's 2% target with some economists forecasting a further rise this year.

However, with Warsh and his past reputation as an inflation fighter, gold prices dropped.

\\"Gold sold off because a hawkish Fed chair nominee implies less tolerance for inflation and less appetite for financial repression,\\" Malek said.

The U.S. dollar reversed some of its losses from this year after the Warsh announcement because of the perception that Warsh won't slash rates to appease Trump.

\\"It appears this could at least lower the risks of another major leg lower in the dollar for now,\\" said Francesco Pesole, foreign exchange strategist at Dutch bank ING.

This article originally appeared on USA TODAY: Trump's Fed pick to replace Powell pushes stocks lower. Why?