Dow, S&P 500, Nasdaq slip with Powell speech, Trump-led sweep in focus
US stocks slipped on Thursday as the post-election rally paused, while investors assessed the impact of a Republican sweep of political power and awaited a Jerome Powell speech to set the tone on interest rate cuts.
The Dow Jones Industrial Average (^DJI) slipped 0.2%, while the S&P 500 (^GSPC) dipped 0.3%. The Nasdaq Composite (^IXIC) was down 0.3%, coming off a mixed day for the three major gauges.
Though the mood is muted, stocks are still near recent records after the latest consumer inflation data kept hopes for a December rate cut aloft. That optimism broadly held after a reading on wholesale inflation showed prices firmed slightly more than expected in October.
The focus is on how the Federal Reserve chair sees inflation developing as investors gauge the odds of rates going back to staying higher for longer. The market is already weighing the potential upward pressure on prices from President-elect Donald Trump’s policies.
Read more: What the Fed rate cut means for bank accounts, CDs, loans, and credit cards
Republicans held onto their slim majority in the House of Representatives, handing Trump and his party a “trifecta” — unified control of power across Washington. The sweep limits curbs on implementing the incoming president’s aggressive economic agenda, which has helped spur the post-election breakneck rally in stocks.
Worries about Trump’s America-first plans helped drag Chinese stocks down as much as 20% from their October high in Hong Kong, with tech hardest hit.
Tesla (TSLA) stock declined as much as 4% as the post-election “Trump trade” shows signs of fatigue.
Meanwhile Disney’s (DIS) stock surged 7% after quarterly earnings beat estimates as the entertainment giant’s streaming unit swung to a profit.
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Tesla slides 3% as post-election Trump trade wanes
Tesla (TSLA) shares declined more than 3.5% on Thursday as investors are taking profits off the table following a massive surge in the “Trump trade” favorite.
With Thursday’s slide, the stock is still up more than 25% since Donald Trump’s White House victory last week over optimism that CEO Elon Musk’s close ties to the president-elect will loosen regulations around autonomous driving.
Meanwhile, on Wednesday the electric vehicle giant issued its sixth recall this year. The company recalled 2,400 Cybertruck pickups due to a faulty part could lead to a loss of power and increase the risk of a collision.
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