NEW YORK (AP) — U.S. stocks tumbled Friday toward their worst decline since the presidential election. big bump Wall Street learned from last week's events. donald trump victory and cut interest rate by the Federal Reserve Board faded.
The S&P 500 fell 1.4%, marking its worst week since October. As of 12:32 p.m. ET, the Dow Jones Industrial Average was down 381 points, or 0.9%, and the Nasdaq Composite was down 2.2%.
Vaccine makers helped drive the market down after President-elect Donald Trump said he wanted to make Robert F. Kennedy Jr. a prominent figure. anti-vaccine activistto be his Secretary of Health and Human Services. Moderna fell 9.8% and Pfizer fell 4.8% amid concerns about a potential hit to profits.
Kennedy still needs Senate confirmation to take office, but some analysts are skeptical about his chances because of his views on vaccines and criticism of the pharmaceutical industry.
“But Mr. Kennedy's views depart so far from traditional Republican health policy orthodoxy that it would be difficult for investors to avoid risk even if he were confirmed,” Raymond said.・James analyst Chris Meekins said in a research note. Mr. Meekins is a former deputy assistant secretary at the department known as HHS.
“Investors may need to forget everything they thought they knew about the Republican Party and health care,” he said. “Mr. Kennedy's appointment could further increase uncertainty by making it less likely that experienced (Republican) officials with traditional qualifications would agree to join HHS.”
The only stock in the S&P 500 that fell more than Moderna was Applied Materials, which fell 8.5% even though the company reported better-than-analyst-expected earnings for its latest quarter. The company, which provides manufacturing equipment and services to the semiconductor industry, provided a projected range for future earnings, but the midpoint was below analysts' expectations.
With stock prices rising faster than profits, companies are under pressure to achieve significant growth. That makes the overall stock market look more expensive by many measures, and critics are calling for it to at least subside. The S&P 500 remains up 23% year-to-date and near all-time highs. Best ever Despite the downturn this week, it was set a few days ago.
Stock prices have generally skyrocketed since Election Day, when Trump's victory shocked financial markets around the world. Investors soon began sending in stocks of banks, small U.S. companies, and other companies. cryptocurrency like them bet About the winners born from President Trump's preferences Raising tariffs, lowering tax rates, and relaxing regulations.
But investors are also considering some of the potential downsides of President Trump's return to the White House.
In addition to Friday's hit to vaccine makers, U.S. Treasury yields have also been rising in bond markets, both due to the economy's surprising resilience and concerns that President Trump's policies will spur growth. Expanding US government deficit and accelerating inflation.
That's forcing traders to recalibrate how much relief the Federal Reserve will provide to the economy next year through interest rate cuts. The Fed lowered its key interest rate for the second time this year earlier this month, and past forecasts released by Fed officials indicate that further rate cuts are likely by 2025.
Lower interest rates could serve as fuel for the economy and stock market, especially after the Fed kept interest rates at 20-year highs, but they could also put upward pressure on inflation.
On Thursday, Federal Reserve Chairman Jerome Powell proposed to the U.S. central bank: Be cautious Regarding future interest rate decisions. He declined to say how Trump's policies might change the situation, but said: “The economy is not sending a signal that we need to rush to cut rates.”
Traders have since chipped away at whether the Fed will cut rates again at next month's meeting, but still view it as more likely than a coin toss, according to data from CME Group.
U.S. Treasury yields were mixed in the bond market on Friday following several reports on the economy.
one showed Shoppers spent more at U.S. retailers Last month's better-than-expected gains were another sign that the forces that most influence the economy remain strong.
“Many consumers reported postponing travel and big-ticket purchases until after the election,” said Brian Jacobsen, chief economist at Annex Wealth Management. “Many companies reported deferring capital spending due to the election. Now that the uncertainty of the outcome has passed, we may see some decent ‘relief spending’.”
However, Friday's retail sales data may not be as strong as it appears. Retail store sales were lower than economists expected last month after car purchases fell.
Meanwhile, another report showed strong growth in manufacturing activity in New York state. This far exceeded expectations of zero growth and exceeded the negative growth seen in October. Some of the survey responses were collected after Election Day.
In the bond market, the 10-year US Treasury yield held steady at 4.44%. The two-year Treasury yield, which more accurately reflects expectations for Fed action, fell to 4.30% from 4.36% late Thursday.
In overseas stock markets, London's FTSE 100 index fell 0.1% after data from the Office for National Statistics showed. economic growth has slowed In the July-September period, it rose to 0.1% from 0.5% in the previous period. It was weaker than expected.
Tokyo's Nikkei stock average rose 0.3% after the data showed growth. japanese economy The momentum accelerated in the latest quarter, even as the Bank of Japan raised interest rates in July.
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AP writers Matt Ott and Zimo Zhong contributed.
