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US stocks sank on Friday, on track for weekly losses as investors absorbed Chair Jerome Powell's signal that the Federal Reserve won't hurry to make interest-rate cuts.
The S&P 500 (^GSPC) dropped 1.2%, while the Dow Jones Industrial Average (^DJI) slid roughly 0.7%. The tech-heavy Nasdaq Composite (^IXIC) led declines, falling nearly 2%.
Powell's hawkish comments are casting a pall on markets as the initial optimism for President-elect Donald Trump's policies starts to wear off. The S&P has already reversed one-third of its post-election rally, and the Nasdaq is poised for a weekly loss of around 1%.
Retail sales data released on Friday morning reflected continued resilience in the American consumer, a sign of the economic strength Powell suggested would allow the Fed to take its time. October sales rose 0.4% month on month, versus 0.3% expected, including a revision higher for September's reading to 0.8% from 0.4%.
Wall Street is back to puzzling over the Fed's path next year, a question already muddied by this week's inflation prints. As of Friday morning, traders are pricing in 55% odds of a rate cut at its December policy meeting, compared with 72% the day before, per CME FedWatch tool. Bets on a January easing stand at 69%, versus the previous 81%.
Read more: What the Fed rate cut means for bank accounts, CDs, loans, and credit cards
At the same time, investors kept a watchful eye on Trump's preparations for power, after vaccine stocks fell amid reports Robert F. Kennedy Jr will be named top health official. JPMorgan Chase (JPM) CEO Jamie Dimon made it clear Thursday he won’t be joining the new president's team.
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Consumers keep spending as October retail sales top estimates
October retail sales grew from the prior month, reflecting continued resilience in the American consumer.
Retail sales rose 0.4% in October, reports Yahoo Finance's Josh Schafer.
Economists had expected a 0.3% spending, according to Bloomberg data. Meanwhile, retail sales in September were revised up to a 0.8% increase from a prior reading that showed a 0.4% increase in the month, according to Census Bureau data. Auto sales drove a majority of the gains in October's reading with sales in the sector rising 1.6%.
The report comes as investors continue to closely monitor the health of the US economy as the Federal Reserve's dials back its restrictive interest rate policy. To date, economic data has largely been better-than-expected, a welcome sign for investors as markets shift to accept the Fed may not slash interest as quickly as initially hoped.
In prepared remarks on Thursday, Fed Chair Jerome Powell said “the economy is not sending any signals that we need to be in a hurry to lower rates."
Powell added, "the strength we are currently seeing in the economy gives us the ability to approach our decisions carefully.”
Stocks on track for weekly losses as Fed signals hawkish stance
US stocks fell on Friday, on track for weekly losses as investors absorbed Chair Jerome Powell's signal that the Federal Reserve won't hurry to make interest-rate cuts.
The S&P 500 (^GSPC) dropped over 0.6%, while the Dow Jones Industrial Average (^DJI) slid roughly 0.4%. The tech-heavy Nasdaq Composite (^IXIC) led declines, falling 0.9%.
Powell's hawkish comments are casting a pall on markets as the initial optimism for President-elect Donald Trump's policies starts to wear off. The S&P has already reversed one-third of its post-election rally, and the Nasdaq is poised for a weekly loss of around 1%.
Moderna, Novavax stocks extend declines on Trump's pick of RFK Jr. for health secretary
Shares of Moderna (MRNA) and Novavax (NVAX) extended declines Friday morning following President-elect Donald Trump's pick of Robert F. Kennedy Jr. to head the Department of Health and Human Services.
Moderna fell around 2%, and Novavax dropped almost 1%. Pfizer (PFE) edged down around 0.7%. The moves follow sharp declines in shares of the stocks on Thursday, as Yahoo Finance's Josh Schafer reported.
With the premarket tumble, Novavax is now down more than 40% for the month. Moderna has fallen over 30%, and Pfizer has dropped over 10% during the same period.
Trump confirmed RFK Jr.'s nomination on X after the market close Thursday.
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