Dow falls more than 350 points, retreating from record as postelection rally takes breather: Live updates
Traders work on the floor of the New York Stock Exchange.
NYSE
Stocks retreated on Tuesday as the major averages took a breather from their postelection run.
The Dow Jones Industrial Average pulled back 382.15 points, or 0.86%, while the S&P 500 dropped 0.29%. The Nasdaq Composite ended the session marginally lower by 0.09%. Both the tech-heavy Nasdaq and the S&P 500 snapped five-day win streaks.
Key components of the so-called Trump trade were among the most notable losers Tuesday. Small-cap stocks, which are viewed as a potential beneficiary of a second Trump presidency, were broadly under pressure, with the Russell 2000 dipping about 1.8%.
Shares of Tesla, which have advanced 31% since Election Day, sank 6.1% on Tuesday, while Trump Media & Technology Group fell nearly 9%. The stock is down 10% since Trump’s victory.
Stocks may have already gotten ahead of themselves even before Trump earned a second term in the White House last week, according to Siebert chief investment officer Mark Malek. Now that the market has removed the overhang of the election, some of the core economic headwinds that have lingered are coming back to the forefront, he added.
“What’s driving today’s trade is maybe a little bit of exhaustion,” Malek told CNBC. “We’re all concerned about [debt and deficits]. The deficit is always a problem when it’s a problem, but right now the market views it as a problem. It may be a reason to take your foot off of the gas when the market already has a bit of indigestion.”
Market participants will next turn their attention to consumer and producer price index readings scheduled for later in the week. The release of these inflation gauges comes after the Federal Reserve last week announced another interest rate cut.
Tuesday’s action comes a day after the Dow closed above 44,000 for the first time. The S&P 500 also had its first close above 6,000. The trading has reflected investor optimism that Donald Trump’s return to the White House could bring both lower taxes and looser regulations, and ultimately serve as a boon to the broader market.
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