NEW YORK (AP) — U.S. stocks edged lower as momentum came out of the torrid “Trump trade” that swept Wall Street following Donald Trump’s presidential victory. The S&P 500 slipped 0.3% Tuesday, coming off its latest record. The Dow Jones Industrial Average fell 0.9%, and the Nasdaq composite slipped 0.1%. Yields jumped in the bond market to add pressure on stocks. Smaller U.S. stocks sank in a turnaround from their rocket ride higher after Trump’s win raised expectations for economic growth and inflation. Tesla, which is run by Trump’s ally Elon Musk, had its first drop since before Election Day.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
NEW YORK (AP) — U.S. stocks are drifting Tuesday as some momentum comes out of the torrid “Trump trade” that swept Wall Street following Donald Trump’s presidential victory.
The S&P 500 was 0.1% lower in late trading, coming off its latest all-time high. The Dow Jones Industrial Average was down 259 points, or 0.6%, with an hour remaining in trading, and the Nasdaq composite was virtually flat.
Stocks have been broadly rising on expectations that Trump’s preference for lower tax rates and other policies may mean faster economic growth, as well as bigger U.S. government debt and higher inflation. Some areas of the market have launched on particularly high-grade fuel, such as smaller U.S. stocks seen as benefiting the most from Trump's America First ideas.
They gave back some of their big gains on Tuesday, and the Russell 2000 index of smaller companies fell a market-leading 1.6%. Even Tesla, which is run by Trump’s ally Elon Musk, sank. It dropped 5.1% and was on track for its first loss since before Election Day.
The stock that’s become most entwined with Trump’s popularity, Trump Media & Technology Group, fell 6.9%.
A jump in Treasury yields added pressure on the stock market, as trading of U.S. government bonds resumed following Monday’s Veterans Day holiday. The yield on the 10-year Treasury jumped to 4.43% from 4.31% late Friday, which is a notable move for the bond market.
Treasury yields have been climbing sharply since September, in large part because the U.S. economy has remained much more resilient than feared. The hope is that it can continue to stay solid as the Federal Reserve continues to cut interest rates in order to keep the job market humming, now that it’s helped get inflation nearly down to its 2% target.
Some of the rise in yields has also been because of Trump. He talks up tariffs and other policies that economists say could drive inflation and the U.S. government’s debt higher, along with the economy’s growth. That puts upward pressure on Treasury yields and could hinder the Fed's plans to cut interest rates. Lower rates can boost the economy, but they can also give inflation more fuel.
The next update on inflation will arrive on Wednesday, when the U.S. government gives the latest reading on prices that U.S. consumers are paying across the country. Economists expect it to show inflation accelerated a bit to 2.6% in October from 2.4% the month before. But they’re also looking for underlying inflation trends, which ignore prices for groceries and fuel that can zigzag sharply from month to month, to stay steady at 3.3%.
Helping to limit the losses on Wall Street was Live Nation Entertainment, which joined the lengthening list of U.S. companies delivering stronger profit for the summer than analysts expected. The company behind Ticketmaster said concert fans around the world are spending more to hear artists, and it said trends are already encouraging for 2025 stadium tours for Coldplay and others. Its stock rose 4.7%.
Tyson Foods jumped 7.7% after likewise topping analysts’ forecasts for profit. The producer of beef, chicken and pork also raised its dividend for investors.
Home Depot pulled back 0.3% despite beating analysts’ profit expectations, as it continues to contend with a pullback in spending by customers.
Stocks usually rally following close elections, but this spurt is “clearly faster than prior ones,” according to Parag Thatte and other strategists at Deutsche Bank. It has the S&P 500 on track to deliver a return of more than 20% for a second straight year. That's something that's happened only three times in the past 100 years, according to Deutsche Bank.
In the crypto market, bitcoin soared to another record before pulling back. Trump has embraced cryptocurrencies generally and pledged to make his country the crypto capital of the world. Bitcoin got as high as $89,995, according to CoinDesk, before dropping back toward $89,000. It started the year below $43,000.
In stock markets abroad, indexes fell across much of Europe and Asia. Hong Kong’s Hang Seng dropped 2.8% for one of the worst falls. The Hang Seng closed below the 20,000 level for the first time since China announced a stimulus package in September.
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AP Business Writer Yuri Kageyama contributed.
Stan Choe, The Associated Press
