A trader works on the floor of the New York Stock Exchange on Aug. 4, 2022.
Source: NYSE
The S&P 500 slid after hitting new records on Friday, as investors took some profit near the end of a solid week centered on President Donald Trump’s return to the White House.
The benchmark shed 0.4%, despite hitting a fresh intraday record earlier in the session. The Nasdaq Composite slipped 0.7%. The Dow Jones Industrial Average dropped 204 points, or 0.5%. If the three major indexes end Friday lower, it would snap a four-day win streak for each.
Some megacap tech stocks that helped drive the market to all-time highs pulled back in the session, putting downward pressure on equities. Nvidia slid more than 2%, while Netflix fell more than 1%.
Despite Friday’s retreat, excitement toward Trump’s pro-business policies has largely pushed risk assets higher this week as investors focused on his inauguration. Traders were also relieved that there have only been threats on the tariff front from Trump — instead of formal action — during his first few days in the White House.
All three major averages are on track to post their second positive week, signaling the bull market is back in full force after December’s pullback. The S&P 500 and Nasdaq have each risen around 1.7% week to date, while the Dow climbed 2.2% In addition to hitting fresh intraday records this week, the S&P 500 also notched a new all-time closing high on Thursday.
Notably, Trump said on Thursday that he would “demand that interest rates drop immediately” when addressing world leaders in Davos, Switzerland. The president also said he would ask Saudi Arabia and other OPEC nations to lower the price of oil.
“So far, markets have reacted to every statement made by the President, even those that should not have any impact,” said Mark Malek, chief investment officer at Siebert. “This shows that traders have not yet settled into their pace.”
Beyond politics, market participants kept an eye on corporate news and earnings reports. Novo Nordisk rallied more than 8% following positive early-stage results for a weight-loss drug. Texas Instruments, on the other hand, slid more than 7% on weak earnings guidance.
This action comes ahead of a busy week, when attention will turn to big technology earnings and the Federal Reserve meeting. Fed funds futures are pricing in a more than 99% chance that the central bank leaves interest rates unchanged, according to CMEGroup’s FedWatch tool.
