The shine of the stock market after President Trump's elections fell completely weighted at the end of February, with the early policy priorities of the new administration and weak consumer sentiment that make investors uncomfortable about the economy.
Stocks climbed into new highlights in the immediate aftermath of Mr Trump's victory, while traders were preparing for lighter regulations and tax reductions – expects to accelerate growth. But that rally continued to hold in the last few days when fear about the inflatory impact of new rates began to grow. A malaise in technological shares this week also weighed on the broad market.
By noon on Friday, the S&P 500 – who hit a record of February 19 – was on its way for the worst week of the year with a decrease of around 2 percent. The index has fallen by around 2.5 percent for the month, but it has still risen something for the year.
The pullback was partly driven by renewed concerns about the inflationary effects of radical rates that Mr Trump has already imposed on China and said that he will broaden to Canada and Mexico next week. Together as the end of 2024, investors expected that the Federal Reserve would lower interest this year, relocating that would be positive for shares and the economy, but that position has quickly shifted in the midst of concern that inflation will linger longer than expected. With the rates that have been increased, the concerns have been extended to the broader impact on the economy.
Recent economic surveys that demonstrate a sharp decrease in consumer transition, partly due to pessimism about the prospects of employment, as well as the expectations that prices could rise again, have also bent caution among investors.
“The market had shown a lot of enthusiasm around the elections, and it was based on the chance of favorable load, of a lighter regulatory climate and simply general enthusiasm,” said Steve Sosnick, the main strategist at interactive brokers. “The problem is that those expectations are a bit ahead of reality.”
This is what else you need to know about the recent retreat:
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The concern about the economic prospects are also clear in other markets. The 10-year-old Treasury yield fell to 4.24 percent on Friday, the lowest level since December. Oil prices also fell on Friday, with Brent crude oil with more than 1 percent to just over $ 73 per barrel and trade close to the lowest levels since the end of 2024.
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The excitement about prospects for artificial intelligence had fueled a meeting in technical shares in the past year, but the expectations of investors may be too far stretched. The chip maker Nvidia released on one -month -old results on Wednesday that exceeded the expectations of analysts, but still investors who wanted more. Nvidia's stock fell more than 9 percent this week and dragged the technically heavy Nasdaq down.
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The Nasdaq is about 3.8 percent lower for the month, in what the largest monthly decrease would be since last April.
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Tesla was a highlight in February and fell almost 30 percent for the month after a decrease of 14 percent this week. This week's losses were partly a response to a steep decrease in the European sale of Tesla. More generally, the company, led by Elon Musk, reported a sharp decrease in the win for 2024 last month. The role of Mr. Musk in the Trump government also gives investors pause about his priorities.
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A slide in cryptocurrencies also weighs on shares. Bitcoin, which rose $ 100,000 to a milestone in December, fell by more than 20 percent last month and is closer to $ 80,000. The decrease has come, although the Trump administration has ushered in a lighter regulatory approach to cryptocurrencies, and because Bitcoin has fallen, shares of companies with IT exposure such as Coinbase and Microstrategy have.
Despite the large shares that weigh on general indexes this week, some analysts kept bullish about the long-term front views, and noted that the S&P 500 remains near a record height and the mood on Wall Street is far from in stone. Investor sentiment can “change a dime,” said Mr. Sosnick.
It is still to be seen how long the economic policy of Mr Trump will weigh on the stock market.
“It is certainly possible that shares will experience an extra policy -driven risk in the short term,” said David Lefkowitz, head of shares for America at UBS Global Wealth Management. “But in the end we don't think the Trump administration will take measures that have long -term negative consequences for economic growth or inflation.”
