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US stocks sank on Friday, recording steep weekly losses as investors absorbed Chair Jerome Powell’s signal that the Federal Reserve won’t hurry to make interest-rate cuts.
The S&P 500 (^GSPC) dropped 1.3%, while the Dow Jones Industrial Average (^DJI) slid 0.7%. The tech-heavy Nasdaq Composite (^IXIC) led declines, falling 2.2%.
Powell’s hawkish comments are casting a pall on markets as the initial optimism for President-elect Donald Trump’s policies starts to wear off. The S&P has already reversed one-third of its post-election rally, and the Nasdaq logged a weekly loss of over 3%.
Retail sales data released on Friday reflected continued resilience in the American consumer, a sign of the economic strength Powell suggested would allow the Fed to take its time. October sales rose 0.4% month on month, versus 0.3% expected, including a revision higher for September’s reading to 0.8% from 0.4%.
Wall Street is back to puzzling over the Fed’s path next year, a question already muddied by this week’s inflation prints. As of Friday morning, traders are pricing in 62% odds of a rate cut at its December policy meeting, compared with 72% the day before, per CME FedWatch tool. Bets on a January easing stand at 74%, versus the previous 81%.
Read more: What the Fed rate cut means for bank accounts, CDs, loans, and credit cards
At the same time, investors kept a watchful eye on Trump’s preparations for power, after vaccine stocks fell amid reports Robert F. Kennedy Jr will be named top health official. JPMorgan Chase (JPM) CEO Jamie Dimon made it clear Thursday he won’t be joining the new president’s team.
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Dow loses 300 points as the Trump bump fades and the Fed turns hawkish
US stocks sank on Friday, recording steep weekly losses as investors absorbed Chair Jerome Powell’s signal that the Federal Reserve won’t hurry to make interest rate cuts.
The S&P 500 (^GSPC) dropped 1.3%, while the Dow Jones Industrial Average (^DJI) slid 0.7%. The tech-heavy Nasdaq Composite (^IXIC) led declines, falling 2.2%.
Powell’s hawkish comments are dragging the markets lower after initial optimism for President-elect Donald Trump’s agenda begins to wear off.
The S&P lost more than 2% for the week. The Dow shed 1.2%, and the Nasdaq logged a weekly loss of 3.2%
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A look at the week ahead
Earnings season is winding down but quarterly results from Nvidia scheduled for next week headline an otherwise sparse economic calendar.
The company has been at the heart of the explosive growth of AI. Its shares have risen nearly 200% so far this year, making the chip designer the most valuable publicly traded company by market cap. Nvidia’s earnings will provide another status update on the strength of the industry and will cap a mixed season for the Magnificent Seven stocks.
The following week will also likely bring another flurry of Trump nomination announcements as the president-elect taps business leaders, political figures, and controversial names to fill his proposed cabinet. Two leading contenders for Treasury secretary — Howard Lutnick, CEO of Cantor Fitzgerald, and Scott Bessent, a former Soros Fund Management investing chief — have been making a case directly to Trump as well as through public signals to perhaps sway markets to their side.
Investors will also get a fresh reading on consumer sentiment, existing home sales, and housing starts.
Yahoo Finance’s Brent Sanchez has a graphical breakdown of what to watch next week:
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EV companies push Trump not to end vehicle tax credits
President-elect Trump’s reported plans to get rid of the tax credit for electric vehicles is meeting industry pushback.
On Friday a group representing major electric vehicle and battery manufacturers urged him to reverse course, Reuters reported, pointing to the negative economic impact that would would come by eliminating the credits.
The current $7,500 subsidy has been a key incentive driving consumer adoption of EVs in the US, and its removal could make these vehicles less affordable.
Meanwhile, Tesla shares rose more than 2% Friday as investors and analysts took the news as an advantage for the EV maker, whose CEO is allied with Trump. “While this is a clear negative for the EV industry at first look and would particularly hurt GM, Ford, Stellantis, and Rivian … on the flip side we view this as a net bullish move for Tesla and Musk over time.” wrote Wedbush analysts in a note on Thursday.
“Tesla has a scale and scope that is unmatched and while losing the EV tax credit could also hurt some demand on the margins in the US, this will enable Tesla to further fend off competition from Detroit,” they wrote.
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How CEOs are preparing for Trump tariffs
Several CEOs aren’t adopting an alarmist posture even as economists have warned that if Trump follows through with his promises for stiff new tariffs the new president will unleash economic disruption.
That’s because executives have adapted their businesses for potential geopolitical turmoil, Bloomberg reports, offering some defense against volatility that might be prompted by Trump’s protectionist agenda.
Some executives have expressed confidence in their operations because of changes they’ve made in anticipation of new tariffs, and through supply chain shifts honed during the COVID disruptions. They also highlight that what Trump has said on the campaign trail may not directly translate to new policy.
“There is some natural cover-up against possible tariffs or whatever, but let’s not speculate whether there are tariffs. It might also only be that this is a verbal issue,” said BMW CEO Oliver Zipse during an earnings call. Companies in recent years have also shifted some manufacturing away from China or already have operations domestically.
“In the United States, I would think we almost have a perfect setup for the time to come,” Zipse said.
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Stocks trending in afternoon trading
Here are some of the stocks leading Yahoo Finance’s trending tickers page during afternoon trading on Friday:
Palantir (PLTR): Shares of the the software platform Palantir (PLTR) rose more than 8% Friday after the company announced that it would list on the Nasdaq later this month and expects to be eligible to join the Nasdaq 100 index.
Pfizer (PFE): The pharmaceutical company fell 4%, continuing a slide among vaccine makers, including Moderna (MRNA) and Novavax (NVAX), after President-elect Trump named Robert F. Kennedy Jr. as secretary of Health and Human Services. Kennedy is an outspoken skeptic of vaccines.
Pool Corp. (POOL): Shares of the pool equipment distributor of rose nearly 2% Friday afternoon following news that Warren Buffett’s Berkshire Hathaway (BRK-A, BRK-B) recently disclosed a stake in the company. The 1% stake in Pool Corp., valued at $152 million, appeared to serve as a green light for other investors who track Berkshire’s portfolio and investment decisions.
Applied Materials (AMAT): The maker of chip-manufacturing equipment tumbled more than 8% Friday following an earnings report that missed expectations for first-quarter sales and that came with a disappointing sales outlook, suggesting a slowdown in customer orders. Other chip and tech stocks have sunk in tandem, including Nvidia (NVDA) and Broadcom (AVGO).
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Stocks fall in afternoon trading
All three major gauges were on track to record losses for the week as investors reacted to fresh signals from the Federal Reserve that interest rate cuts won’t be fast-tracked.
The S&P 500 (^GSPC) dropped 1.4%, while the Dow Jones Industrial Average (^DJI) slid 0.8%. The tech-heavy Nasdaq Composite (^IXIC) led declines, falling nearly 2.3%.
Fed Chair Powell’s recent hawkish comments have put the brakes on the market, halting what had been optimism over what a second Trump presidency would mean for Wall Street.
The S&P is on track to shed 2.2% for the week. The Dow is poised to lose 1.5% , while the Nasdaq is set to give up more than 3%.
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Palantir rises to record high ahead of Nasdaq listing
Shares of the the software platform Palantir (PLTR) rose more than 9% Friday after the company announced that it would list on the Nasdaq later this month and expects to be eligible to join the Nasdaq 100 index.
Investors pounced on the move, pushing the stock to a record high and setting Palantir up to be the best-performing S&P stock so far this year. Shares have climbed nearly 280% year to date, surpassing AI darling Nvidia’s gains of almost 190%.
The inclusion in the Nasdaq 100 index would give the stock a higher profile and prompt investors who use the gauge as a benchmark to purchase Palantir shares to reflect the index.
Palantir said it would switch its stock listing from the New York Stock Exchange and begin trading on Nasdaq on Nov. 26, Reuters reported.
Prior to the announcement, Palantir gained momentum in recent months as part of the AI play and defense trade.
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Why the healthcare stock slide might be an overreaction
Vaccine and other healthcare stocks fell Friday after President-elect Donald Trump said Robert F. Kennedy Jr. is his pick to lead the US Health and Human Services Department (HHS). But some analysts think the reaction may overstate the changes RFK might bring to the agency, reports Yahoo Finance’s Anjalee Khemlani.
“Admittedly, it is difficult to evaluate the exact impact this appointment could have on the industry until we have more information on specific policy proposals and priorities of the incoming administration on healthcare and the drug industry,” wrote JPMorgan analyst Chris Schott in a note to clients Friday.
RFK Jr., a vocal skeptic of the drug approval process, will be able to select leaders of all the health departments under HHS, including the US Food and Drug Administration (FDA) and Centers for Disease Control and Prevention (CDC).
“We are not surprised the sector has been under pressure on the potential for RFK Jr. having oversight of the various agencies within HHS … given his previous stated views on the industry,” Schott wrote.
But, like other aspects of future Trump administration policy, it’s unclear how much of the political rhetoric will turn into actual policy.
Read more about the healthcare sector’s reaction to RFK Jr. here
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Consumers keep spending as October retail sales top estimates
October retail sales grew from the prior month, reflecting continued resilience in the American consumer.
Retail sales rose 0.4% in October, reports Yahoo Finance’s Josh Schafer.
Economists had expected a 0.3% spending, according to Bloomberg data. Meanwhile, retail sales in September were revised up to a 0.8% increase from a prior reading that showed a 0.4% increase in the month, according to Census Bureau data. Auto sales drove a majority of the gains in October’s reading, with sales in the sector rising 1.6%.
The report comes as investors continue to closely monitor the health of the US economy and the Federal Reserve’s dials back its restrictive interest rate policy. To date, economic data has largely been better than expected, a welcome sign for investors as markets shift to accept the Fed may not slash interest rates as quickly as initially hoped.
In prepared remarks on Thursday, Fed Chair Jerome Powell said, “The economy is not sending any signals that we need to be in a hurry to lower rates.”
Powell added, “The strength we are currently seeing in the economy gives us the ability to approach our decisions carefully.”
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Stocks on track for weekly losses as Fed signals hawkish stance
US stocks fell on Friday, on track for weekly losses, as investors absorbed Fed Chair Jerome Powell’s signal that the Federal Reserve won’t hurry to make interest rate cuts.
The S&P 500 (^GSPC) dropped over 0.6%, while the Dow Jones Industrial Average (^DJI) slid roughly 0.4%. The tech-heavy Nasdaq Composite (^IXIC) led declines, falling 0.9%.
Powell’s hawkish comments are casting a pall on markets as the initial optimism for President-elect Donald Trump’s policies starts to wear off. The S&P has already reversed one-third of its post-election rally, and the Nasdaq is poised for a weekly loss of around 1%.
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Moderna, Novavax stocks extend declines on Trump’s pick of RFK Jr. for health secretary
Shares of Moderna (MRNA) and Novavax (NVAX) extended declines Friday morning following President-elect Donald Trump’s pick of Robert F. Kennedy Jr. to head the Department of Health and Human Services.
Moderna fell around 2%, and Novavax dropped almost 1%. Pfizer (PFE) edged down around 0.7%. The moves follow sharp declines in shares of the stocks on Thursday, as Yahoo Finance’s Josh Schafer reported.
With the premarket tumble, Novavax is now down more than 40% for the month. Moderna has fallen over 30%, and Pfizer has dropped over 10% during the same period.
Trump confirmed RFK Jr.’s nomination on X after the market close Thursday.
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