U.S. stocks fell on Friday, signaling a pullback from all-time highs as turmoil in Europe rattled nerves and Elon Musk’s compensation package drew attention to Tesla (TSLA).
The Dow Jones Industrial Average (^DJI) led the decline, down about 0.5%, while the S&P 500 (^GSPC) lost 0.4%. The tech-heavy Nasdaq Composite Index (^IXIC) lost 0.3%.
Stocks are losing momentum after four straight days of record highs for the benchmark S&P 500 and Nasdaq, buoyed by strength in technology stocks, though both indexes are still trending higher for the week.
The unexpected weakening in wholesale price pressures was encouraging for investors who had been expecting two rate cuts this year, as the decline will likely be reflected in upcoming PCE inflation figures that the Federal Reserve is closely watching.
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But the Fed this week cut its forecast for rate cuts in 2024 from three to one, leaving markets confused and stocks vulnerable to mood shifts. Strong tech stocks led broader gains, helping the S&P 500 and Nasdaq rally to weekly gains, at least for now. But the Dow is set to face losses this week as questions remain about the extent of its gains this year.
Meanwhile, Tesla shares rose about 2% on Friday morning after shareholders reapproved CEO Elon Musk’s $56 billion compensation package. The electric vehicle maker announced that 77% of votes were in favor, despite opposition from some major investors.
A sell-off in European stocks (^STOXX) has dampened investor morale, putting them on track for their worst week since October, as investors worry about the impact on markets of a political breakthrough for the far-right or a victory in France’s general elections.
Among individual stocks, Photoshop maker Adobe (ADBE) shares rose 15% after the company reported strong AI sales forecasts.
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