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Read MoreMarkets Wrap: Dow Drops 200 Points as Fed Caution Stalls Post-Election Rally
Market Overview:
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.
Corporate News:
- Tesla Inc. faced a significant drop of 5%, partly driven by news of potential changes in EV tax credits under the upcoming administration.
- Hims & Hers Health Inc. saw shares decline after Amazon.com Inc. announced plans to market hair-loss medications, directly impacting Hims & Hers’ telehealth business.
- Meta Platforms Inc. incurred a €798 million fine from EU regulators over antitrust violations involving its Facebook Marketplace integration.
- ASML Holding NV, a leader in advanced chip-making equipment, reaffirmed its long-term revenue outlook due to expected demand growth from AI-driven semiconductor needs.
- Ford Motor Co. agreed to pay a $165 million civil penalty for delays in recalling cars with faulty rearview cameras.
- Merck & Co. licensed a cancer antibody from a Chinese firm in a deal worth up to $3.3 billion, including milestone payments.
- General Mills Inc. expanded its pet food portfolio with a $1.45 billion acquisition of Whitebridge Pet Brands’ North American division.
- Capri Holdings Ltd and Tapestry Inc. canceled their $8.5 billion merger plans following a court ruling in response to antitrust objections.
- JD.com Inc. posted a 5.1% revenue increase in the latest quarter, reflecting cautious consumer spending amid Beijing’s economic stimulus efforts.
*All data in this blog is sourced from reputable media outlets such as CNBC, Yahoo Finance, and Bloomberg. If any content infringes on copyright, please notify us for immediate removal.
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