Traders work on the floor at the New York Stock Exchange (NYSE), after Republican Donald Trump won the U.S. presidential election, in New York City, U.S., November 6, 2024.
Andrew Kelly | Reuters
U.S. stocks slid on Thursday, as fresh comments from Federal Reserve Chair Jerome Powell signaled that economic strength could warrant some patience with future rate cuts.
The Dow Jones Industrial Average slipped 189 points, or 0.4%, after falling more than 250 points at the lows of the session. The S&P 500 ticked down 0.4%, while the Nasdaq Composite pulled back 0.6%.
Stocks took a leg lower after Federal Reserve Chairman Jerome Powell said in Dallas the central bank didn’t need to be “in a hurry” to slash rates.
“The strength we are currently seeing in the economy gives us the ability to approach our decisions carefully,” Powell said.
Fed funds futures trading reflected a decline in odds for a quarter-point cut at the central bank’s December meeting, sliding to about 62% Thursday afternoon from 82.5% earlier in the day.
So-called “Trump Trades” also lost steam as the market rally cooled. Tesla tumbled 5%, while the small-cap benchmark Russell 2000 dropped 1% and underperformed the major averages.
Those moves come after the October producer price index released Thursday rose 0.2%, matching forecasts from economists polled by Dow Jones.
PPI excluding food and energy ran faster than forecast. The October consumer price index came in as expected on Wednesday, but nevertheless signaled the Federal Reserve’s fight against inflation is yet to be won. Core CPI rose by 0.3% for a third straight month, with the 12-month rate at 3.3%.
Investors are deliberating whether a postelection rally following Donald Trump’s decisive victory last week still has room to run after powering the major averages to new milestones. The Dow closed above 44,000 for the first time on Monday, and both the S&P 500 and Nasdaq Composite notched new highs.
“The fact that we had such an explosive week last week, now [we’re] having a little bit of a hangover and a malaise,” said Jay Woods, chief global strategist at Freedom Capital Markets. “But we’re holding onto most of those gains, so I think this week if anything is constructive.”
