The nightmare scenario for Washington is that the country erupts into a civil war pitting the Shia Houthis against Sunni tribes backed by al-Qaeda
The next few days may feature more chaos as the situation in Saudi Arabia combines with this change in Yemen to make fluidity and flux the dominant tool of governance. US Navy amphibious ships sit offshore for any embassy evacuation in case the situation gets worse.
The resignation of the Yemeni president and his government is likely to plunge an already unstable country into uncharted territory.
Mr Hadi has been surrounded in his home in the capital, Sanaa, by rebels for several days. His resignation may be the last card he had left to play after being pushed to the brink.
The rebels have publicly welcomed his resignation but it is not what they wanted. As minority Shias from the north, their authority will not be accepted in the south, where many want to return to having their own state.
With no president and no government, there is also a fear that al-Qaeda's powerful branch in Yemen could make new gains from the political vacuum.