U.S. stocks dipped on Thursday as Federal Reserve Chair Jerome Powell’s cautious stance on rate cuts weighed on investor sentiment. Powell’s remarks emphasized a measured approach to adjusting interest rates due to strong economic indicators, signaling that immediate rate cuts may not be necessary. As a result, the Dow Jones Industrial Average dropped 189 points (0.4%), the S&P 500 slid 0.4%, and the Nasdaq Composite fell 0.6%.

The October Producer Price Index (PPI) showed a 0.2% increase, aligning with forecasts and adding pressure to inflation concerns. Core CPI data indicated a third consecutive monthly rise of 0.3%, maintaining an annual rate of 3.3%. These inflation figures, combined with recent economic growth, influenced investor caution toward equities. The Russell 2000 index, tracking small-cap stocks, lagged by 1%, reflecting reduced momentum in the recent post-election rally.

Despite previous bullish sentiment driven by expectations of economic growth under Trump’s administration, markets displayed signs of fatigue. The American Association of Individual Investors’ latest data revealed elevated optimism, though experts noted that overbought indicators suggest a possible short-term pullback. Treasury 10-year yields edged down to 4.42%, while the Bloomberg Dollar Spot Index showed volatility. Market analysts anticipate that while minor corrections may occur, the overall upward trend could persist toward year-end.