Wall Street's main indexes closed lower on Friday, with the S&P 500 and Nasdaq notching their biggest one-day losses in two weeks, as Trump trades lost steam and investors bet the US Federal Reserve will have to slow the pace of policy easing.
Federal Reserve chairman Jerome Powell on Thursday cited continuing economic growth, a solid job market, and inflation above the US central bank's 2 per cent target as reasons the central bank can afford to be careful with the pace and scope of future rate cuts.
“The post-election rally paused for breath, with the latest Fed comments on the economy stopping the surge in its tracks,” said Richard Hunter, head of markets at Interactive Investor.
“Chairman Powell popped some of the party balloons, stating that the Federal Reserve did not need to be in a hurry to cut interest rates. Quite apart from an economy which continues to grow despite the backdrop of higher interest rates, the Fed will be acutely aware that some of the new president’s policies, such as tax cuts and tariffs, will likely be inflationary. As such, the central bank is perhaps signalling that it would rather keep its powder dry until those inflationary impacts are better known.”
As the initial euphoria about president-elect Donald Trump’s pro-business agenda begins to fade, investors are coming to terms with the costs of his fiscal plans and their potential to reignite inflation.
Traders increased bets the Fed will not change rates at its December meeting, pricing in a roughly 42 per cent chance, versus roughly 14 per cent a month ago, according to the CME FedWatch tool. They also dialled back expectations for easing in 2025.
This view was reinforced by Friday's economic data showing US retail sales rose slightly more than expected in October. Import prices also rebounded and data released on Wednesday and Thursday showed sticky inflation.
“All in all, the Fed is coming to the realisation that cutting rates hurriedly was not a brilliant idea, and the first thing to do now is to do nothing in December,” said Ipek Ozkardeskaya, senior analyst at Swissquote.
Mr Hunter said the market consensus for a cut in December remains at over 60 per cent, although the figure dropped from a previous 82 per cent before Mr Powell’s comments.
“The move follows a further reading on wholesale inflation in the form of the Producer Price Index, which rose by 2.4 per cent from the year before, a slight acceleration from the previous month’s 1.9 per cent reading. Core PPI was slightly higher than expected and followed a Consumer Price Index number the previous day which suggested that while the direction of travel was intact, the fight against inflation is not quite won,” he added.
Friday’s sell-off ended a week in which market focus shifted from the US election win by Mr Trump, seen as a pro-business choice, to worries about the rate cut path and potential inflation risks under the next administration.
For the week, the S&P 500 fell 2.08 per cent, with tech stocks leading declines. The Nasdaq declined 3.15 per cent, marking their biggest weekly losses in more than two months. The Dow fell 1.24 per cent for the week.
The Dow Jones Industrial Average fell 0.70 per cent, the S&P 500 lost 1.32 per cent and the Nasdaq Composite dropped 2.24 per cent. The small-cap Russell 2000 index ended down 1.4 per cent, its fourth consecutive session of losses.
CBOE’s volatility index, also known as Wall Street's fear gauge, hit 17.55 earlier on Friday, the highest since election day on November 5. However, the index pared gains to close at 16.14.
On Friday, shares of all “Magnificent Seven” megacaps retreated except Elon Musk’s Tesla, with Amazon, Nvidia and Meta Platforms sliding more than 3 per cent.
Tesla fell nearly 6 per cent on news that Mr Trump would eliminate the $7,500 consumer tax credit for electric vehicles.
Meanwhile, drug makers Moderna and Pfizer came under pressure after Mr Trump named prominent vaccine sceptic Robert F Kennedy Jr as his health secretary.
“With the quarterly reporting season all but wound down, two names next week could add to potential volatility. Walmart will release its numbers, giving a further indication of the state of the consumer, while market darling Nvidia will need to match the increasingly lofty expectations which it now carries, with the stock up by 205 per cent this year alone,” according to Mr Hunter.
“In the meantime, the Dow Jones is now ahead by 16 per cent so far this year, the S&P 500 by 24.7 per cent and the Nasdaq by 27.3 per cent.”
Ms Ozkardeskaya said the US dollar extended gains to the highest levels in more than a year, supported by the hawkish shift in Fed expectations.
“The price action makes sense, but the fact that the US dollar has now stepped into the overbought territory will likely slow the short-term demand for the greenback and could lead to a minor correction. But the price pullbacks should continue to be interesting dip-buying opportunities for the dollar bulls looking for a further extension of gains against majors.”
RESULTS
Main card
Bantamweight 56.4kg: Mehdi Eljamari (MAR) beat Abrorbek Madiminbekov (UZB), Split points decision
Super heavyweight 94 kg: Adnan Mohammad (IRN) beat Mohammed Ajaraam (MAR), Split points decision
Lightweight 60kg: Zakaria Eljamari (UAE) beat Faridoon Alik Zai (AFG), RSC round 3
Light heavyweight 81.4kg: Taha Marrouni (MAR) beat Mahmood Amin (EGY), Unanimous points decision
Light welterweight 64.5kg: Siyovush Gulmamadov (TJK) beat Nouredine Samir (UAE), Unanimous points decision
Light heavyweight 81.4kg: Ilyass Habibali (UAE) beat Haroun Baka (ALG), KO second round
Benefits of first-time home buyers' scheme
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Send “thenational” to the following numbers or call the hotline on: 0502955999
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2252 – Dh 50
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KILLING OF QASSEM SULEIMANI
Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
Killing of Qassem Suleimani
MATCH INFO
Uefa Champions League last 16, second leg
Liverpool (0) v Atletico Madrid (1)
Venue: Anfield
Kick-off: Thursday, March 12, midnight
Live: On beIN Sports HD
UAE currency: the story behind the money in your pockets
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
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- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
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- Disruption Lab and Research Centre for developing entrepreneurial skills
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Graduated from the American University of Sharjah
She is the eldest of three brothers and two sisters
Has helped solve 15 cases of electric shocks
Enjoys travelling, reading and horse riding
Pharaoh's curse
British aristocrat Lord Carnarvon, who funded the expedition to find the Tutankhamun tomb, died in a Cairo hotel four months after the crypt was opened.
He had been in poor health for many years after a car crash, and a mosquito bite made worse by a shaving cut led to blood poisoning and pneumonia.
Reports at the time said Lord Carnarvon suffered from “pain as the inflammation affected the nasal passages and eyes”.
Decades later, scientists contended he had died of aspergillosis after inhaling spores of the fungus aspergillus in the tomb, which can lie dormant for months. The fact several others who entered were also found dead withiin a short time led to the myth of the curse.
Biog
Mr Kandhari is legally authorised to conduct marriages in the gurdwara
He has officiated weddings of Sikhs and people of different faiths from Malaysia, Sri Lanka, Russia, the US and Canada
Father of two sons, grandfather of six
Plays golf once a week
Enjoys trying new holiday destinations with his wife and family
Walks for an hour every morning
Completed a Bachelor of Commerce degree in Loyola College, Chennai, India
2019 is a milestone because he completes 50 years in business
ESSENTIALS
The flights
Emirates flies direct from Dubai to Rio de Janeiro from Dh7,000 return including taxes. Avianca fliles from Rio to Cusco via Lima from $399 (Dhxx) return including taxes.
The trip
From US$1,830 per deluxe cabin, twin share, for the one-night Spirit of the Water itinerary and US$4,630 per deluxe cabin for the Peruvian Highlands itinerary, inclusive of meals, and beverages. Surcharges apply for some excursions.
Election pledges on migration
CDU: "Now is the time to control the German borders and enforce strict border rejections"
SPD: "Border closures and blanket rejections at internal borders contradict the spirit of a common area of freedom"
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A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
Company%20profile
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The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
Red Sparrow
Dir: Francis Lawrence
Starring: Jennifer Lawrence, Joel Egerton, Charlotte Rampling, Jeremy Irons
Three stars
The 12 Syrian entities delisted by UK
Ministry of Interior
Ministry of Defence
General Intelligence Directorate
Air Force Intelligence Agency
Political Security Directorate
Syrian National Security Bureau
Military Intelligence Directorate
Army Supply Bureau
General Organisation of Radio and TV
Al Watan newspaper
Cham Press TV
Sama TV
THURSDAY'S FIXTURES
4pm Maratha Arabians v Northern Warriors
6.15pm Deccan Gladiators v Pune Devils
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Gothia Cup 2025
4,872 matches
1,942 teams
116 pitches
76 nations
26 UAE teams
15 Lebanese teams
2 Kuwaiti teams
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Amitav Ghosh, University of Chicago Press
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WHAT IS A BLACK HOLE?
1. Black holes are objects whose gravity is so strong not even light can escape their pull
2. They can be created when massive stars collapse under their own weight
3. Large black holes can also be formed when smaller ones collide and merge
4. The biggest black holes lurk at the centre of many galaxies, including our own
5. Astronomers believe that when the universe was very young, black holes affected how galaxies formed
Jetour T1 specs
Engine: 2-litre turbocharged
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Tearful appearance
Chancellor Rachel Reeves set markets on edge as she appeared visibly distraught in parliament on Wednesday.
Legislative setbacks for the government have blown a new hole in the budgetary calculations at a time when the deficit is stubbornly large and the economy is struggling to grow.
She appeared with Keir Starmer on Thursday and the pair embraced, but he had failed to give her his backing as she cried a day earlier.
A spokesman said her upset demeanour was due to a personal matter.
Nayanthara: Beyond The Fairy Tale
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