Stocks took a nosedive on Friday as the post-election rally lost steam and concerns arose regarding the direction of interest rates. The Dow Jones Industrial Average dropped by 0.70%, the S&P 500 slipped by 1.32%, and the Nasdaq Composite fell by 2.24%. Pharmaceutical stocks such as Amgen and Moderna were hit hard, partly due to President-elect Donald Trump’s announcement of nominating a vaccine skeptic to lead the Department of Health and Human Services. The SPDR S&P Biotech ETF suffered significant losses as well.
The information technology sector also struggled, with companies like Nvidia, MetaPlatforms, Alphabet, and Microsoft all seeing declines. However, Tesla was an exception, experiencing gains in a challenging market environment. Federal Reserve Chairman Jerome Powell’s remarks about not rushing to cut interest rates added to the uncertainty, which was exacerbated by Boston Fed President Susan Collins suggesting that a rate cut next month was not a certainty.
Despite positive retail sales data for October, the market sentiment remained cautious. The post-election optimism that had driven the market to new highs earlier in the week had started to fade, with the S&P 500, Nasdaq Composite, and Dow all ending the week in negative territory. While the macroeconomic outlook remains favorable, micro volatility around potential policy changes under a new administration could impact the markets in the near term.
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