top line
Trump-inspired stock market rally further dwindled as investors took note of further concerns hawkish Monetary policy has caused big tech stocks to drop sharply as indexes head into a down week, although stock prices have remained positive since last week's election.
On Friday, the Trump-induced stock market rally slowed further.
important facts
By mid-afternoon Friday, stocks were falling across the board. The blue-chip Dow Jones Industrial Average fell 0.7% (305 points), the S&P 500 fell 1.3%, the tech-heavy Nasdaq Composite Index fell 2.2%, and the small-cap Russell 2000 index fell 2.2%. It fell. It fell 1.5%.
All benchmarks except the Nasdaq posted their best week in 2024 as investors were encouraged by the impact of corporate tax cuts and deregulation on profits, amid bullish momentum tied to President Donald Trump's election to a second term. Immediately after the record, all four of these indexes recorded weekly declines. margin.
The indexes are still rising since Election Day, with all four of the indexes mentioned up at least 1% since last Tuesday, but the overall decline is notable.
The Nasdaq 100, which includes the 100 largest U.S. tech companies, suffered a five-day losing streak for the first time since the first week of January, with information technology the S&P's worst-performing sector on Friday, down 2.5% and more than 2%. It fell. Amazon, Meta, and Nvidia are leading the way, with their stock prices falling.
big number
458 billion dollars. That's how much market capitalization the six most valuable U.S. companies (NVIDIA, Apple, Microsoft, Amazon, Alphabet and Meta) lost on Friday, according to YCharts data. Amazon and NVIDIA each lost more than $90 billion in market value. The decline in tech stocks came as investors moved away from sectors seen by Federal Reserve officials as sensitive to rising interest rates. hinted they are may not be possible As expected, there will be another rate cut next month.
tangent
Healthcare stocks also fell on Friday. The S&P Healthcare sector fell 1.9% while Pfizer stock fell 4%. This is a continuation of the slump late Thursday afternoon after President Trump tapped vaccine skeptic Robert F. Kennedy Jr. to head the Department of Health and Human Services.
important quotes
“President Trump's recent unconventional Cabinet changes, combined with the dollar's rise to a 12-month high and the benchmark 10-year Treasury yield rising from 4.29% to 4.41% post-election, have given investors potential ,” Sevens Report founder Tom Essay wrote in a note to clients on Friday.
Why are stock prices falling?
While Wall Street's post-election reaction remains very positive, economists and strategists at Bank of America say the outlook remains very positive ahead of Trump and the Republican-controlled House and Senate taking control in January. This suggests that there is a reason to put the brakes on the euphoric reaction. Investor sentiment and positioning have become “dangerously bullish,” warned Savita Subramanian, Bank of America's top equity strategist, as the proportion of mutual funds held in cash is at its lowest in at least a decade. It points out technical signals such as a decline in the stock market and reaching an all-time high. record A high percentage of consumers expect stock prices to rise over the next 12 months. Bank of America economists led by Aditya Bhave said Friday that risks to growth forecasts are “extraordinary” due to the potential for “fundamental policy changes” under a Republican-controlled Oval Office and Congress. “It's huge,” he told the customer.
Contra
A cautious Bank of America still has a year-end S&P price target of $6,000, expecting it to rise 2% from Friday's $5,860, but the year-end price is below the all-time high of $6,017 set on Monday. I predict that. Wall Street still widely views the Trump administration's impact on the stock market as a positive catalyst, with Goldman Sachs strategists saying last week that lower corporate tax rates were having an impact. floated If President Trump follows through, it would raise S&P companies' earnings estimates by 4% annually.
Read more
