On Thursday, the main U.S. stock indexes took a step back after an impressive rally the day prior, fueled by falling bond yields and optimistic signals regarding inflation.
The Dow Jones Industrial Average dipped by 68.42 points, or 0.2%, finishing at 43,153.13. Meanwhile, the S&P 500 slid down 12.57 points, also a 0.2% decrease, closing at 5,937.34. The Nasdaq Composite Index saw a larger decline, dropping 172.94 points, or 0.9%, to end the day at 19,338.29.
We’re seeing a bit of a rough spell for stocks, leaving the Dow only 2.2% higher since the election on November 5, as reported by Dow Jones Market Data. Back on December 4, the Dow had hit a high during the “Trump bump,” reaching a close of 45,014.04, which marked a 6.6% gain since that November date.
On Thursday, shares of heavyweights like Apple and Tesla both took a hit, falling over 3%, despite the fact that longer 10-year Treasury yields dropped nearly 20 basis points over three sessions. Dow Jones Market Data notes this as the biggest drop since August 5, following a significant reversal of the Japanese yen carry trade.
The 10-year yield fell to 4.606% on Thursday, retreating from its peak of 4.802% earlier in the week on Monday. Nevertheless, caution lingered in the markets. Investors are keeping a close eye on potential policy priorities of the incoming Trump administration and the potential reactions from the Treasury market to these policies.
