U.S. stocks retreated on Friday, signaling a retreat from record highs, as European unrest rattled nerves and put Elon Musk’s Tesla (TSLA) pay package gains in the spotlight.
The Dow Jones Industrial Average (^DJI) fell about 0.5% to lead the declines, while the S&P 500 (^GSPC) lost 0.4%. The technology stock exchange Nasdaq Composite (^IXIC) fell 0.3%.
Stocks lose steam after the benchmark S&P 500 and the Nasdaq record closes for the fourth day in a row, boosted by the strength of the technology sector. Both indices are still on track for weekly gains.
A surprising cooling of pressure on wholesale prices gave investors courage to bet on two rate cuts this year, as the decline is likely to be reflected in the upcoming PCE inflation numbers monitored by the Federal Reserve.
Read more: What influence does the labor market have on inflation?
But the Fed this week cut expected rate cuts from three to one in 2024, keeping the market guessing and stocks vulnerable to mood swings. The strength of tech names has led to broader gains, helping the S&P 500 and Nasdaq post weekly gains — at least for now. But the Dow Jones is facing a loss this week as questions remain about the size of this year’s rally.
Meanwhile, Tesla shares rose about 2% Friday morning after shareholders reapproved CEO Elon Musk’s $56 billion pay package. Despite opposition from some major investors, 77% of votes were cast in favor, the EV maker said.
The mood was dampened by a slump in European shares (^STOXX), which were heading for their worst week since October. Investors are concerned about the consequences for markets if the far right makes political gains or even wins early elections in France.
Among individual movers, shares of Adobe (ADBE) rose 15% after an optimistic AI sales forecast from the Photoshop maker.
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