U.S. stocks tumbled Tuesday as investors reassessed the market rally and the implications of President-elect Donald Trump’s Cabinet picks. The Dow Jones Industrial Average dropped nearly 350 points, or 0.8%. The S&P 500 declined more than 0.2%, and the Nasdaq Composite was down roughly 0.1%.
Key Dow underperformers included Boeing, which fell more than 2.5%, reflecting disruptions from worker strikes in October. Both the S&P 500 and Dow had their worst day since October 31. The pause in equities coincided with a rise in Treasury yields.
The 10-year Treasury yield increased by about 12 basis points to approximately 4.43%. Wall Street analysts have signaled that the post-election stock surge could lose momentum. Investors are contemplating the potential policy impacts of Trump’s Cabinet picks, which include China hawks that may advocate for tougher tariffs, potentially spurring inflation.
Bitcoin neared $90,000 as market hours closed. At 4 p.m. ET, the cryptocurrency was trading around $89,600 per coin. Stocks related to cryptocurrencies and Tesla saw declines after recent rallies.
Market declines after Dow’s rough day
Coinbase dropped more than 2%, and Robinhood fell about 1%. Tesla, which had surged over 40% in recent sessions, pulled back more than 5%.
Federal Reserve Bank of Minneapolis President Neel Kashkari commented that a surprise uptick in inflation before the Fed’s December meeting could lead the central bank to pause interest rate cuts. The Consumer Price Index report due Wednesday morning is expected to provide insight into inflation trends. Boeing reported only 14 commercial plane deliveries in October, a sharp decline attributed to a seven-week strike by its largest union.
The strike’s end last week allows production to resume, but Boeing faces ongoing challenges as it aims to recover lost earnings. Bank of America CEO Brian Moynihan emphasized the importance of an independent Federal Reserve, noting that while presidential influence is not new, the Fed should maintain focus on setting appropriate interest rates. As of midday, all three major indices remained near session lows.
Rising Treasury yields were a contributing factor, with the 10-year yield nearing 4.42% and the 2-year yield climbing to 4.35%, its highest level since late July. Snap Inc. shares fell about 4% following reports that President-elect Trump might halt a potential U.S. ban of TikTok, affecting Snap’s competitive position.
Inflation expectations among consumers reached a four-year low in October, according to a Federal Reserve Bank of New York survey, projecting inflation at 2.9% in one year. BlackRock’s Rick Rieder expressed concerns over the high valuation multiples of the S&P 500 but remained bullish on equities due to ongoing demand driven by 401(k) flows and corporate buybacks.
