The roaring rally in U.S. stocks lost steam on Tuesday, with futures halted as investors assessed whether the buying had been overdone and what Donald Trump’s Cabinet picks meant for policy.
Dow Jones Industrial Average futures (YM=F) fell 0.1%, while S&P 500 futures (ES=F) lost about 0.2% after both indicators closed above key milestones. Contracts on the tech-heavy Nasdaq 100 (NQ=F) fell 0.1%.
Wall Street analysts are signaling that the post-election stock rally could soon weaken after lifting leading indicators to record levels. Investors have raised their exposure to U.S. stocks to an 11-year high, Bank of America found, and those bullish bets set the stage for profit-taking, Citi strategists said.
At the same time, the market is reflecting on the political impact of Trump’s likely cabinet picks. Florida Sen. Marco Rubio has been tapped for secretary of state, joining other prominent China hawks on the team. The prospect of tougher tariffs weighed on Chinese stocks and lent weight to concerns that the next president’s economic plans could spur inflation.
Bitcoin’s record rally put the cryptocurrency on the verge of touching $90,000 at one point early Tuesday before its pace slowed. The token was last trading near $87,240, up around 6%.
Other “Trump businesses” also lost some enthusiasm. Tesla (TSLA) stock fell into the red in premarket after soaring thanks to CEO Elon Musk’s alliance with the incoming president. Crypto-linked stocks Coinbase (COIN) and Robinhood (HOOD) struggled to make gains.
Attention is starting to focus on Wednesday’s report on the October consumer price index, looking for signs that inflation is cooling as the Federal Reserve wants. Thursday’s retail sales data is another key input to the Fed’s policy decision at its December meeting, the last before the Trump administration takes office.
Read more: What the Federal Reserve’s rate cut means for bank accounts, CDs, loans and credit cards
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Live stock market coverage for Tuesday, November 12, 2024