U.S. stocks fell on Friday, on track for weekly losses, as investors absorbed Chairman Jerome Powell’s signal that the Federal Reserve will not rush to cut rates.
The S&P 500 (^GSPC) fell more than 0.6%, while the Dow Jones Industrial Average (^DJI) fell about 0.4%. The tech-heavy Nasdaq Composite (^IXIC) led declines, falling 0.9%.
Powell’s hawkish comments put a damper on markets as initial optimism about President-elect Donald Trump’s policies begins to wane. The S&P has already reversed a third of its post-election rally and the Nasdaq is poised for a weekly loss of about 1%.
Retail sales data released Friday morning reflected the continued resilience of the U.S. consumer, a sign of economic strength that Powell said would allow the Fed to take its time. October sales rose 0.4% month-on-month, versus an expected 0.3%, including a higher revision for September’s figures from 0.4% to 0.8%.
Wall Street is once again puzzling over where the Fed will move next year, a question already clouded by this week’s inflation data. After that, traders at the December policy meeting estimated a 55% chance of a rate cut, compared to 72% the day before, according to CME FedWatch tool. Bets on an easing in January stand at 69%, up from 81% previously.
Read more: What the Fed’s interest rate cut means for bank accounts, CDs, loans and credit cards
At the same time, investors were keeping a close eye on Trump’s preparations for power after vaccine supplies fell amid reports that Robert F. Kennedy Jr. would be appointed top health official. JPMorgan Chase (JPM) CEO Jamie Dimon made it clear Thursday that he will not join the new president’s team.
Meanwhile, shares of Domino’s Pizza (DPZ) and Pool Corp. (POOL) rose in morning trading after filings showed Warren Buffett’s Berkshire Hathaway bought the shares.
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