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Ongoing inflationary pressures indicate that the Federal Reserve may hesitate to make significant interest rate cuts, which could pose a challenge for the market in the short term.
In New York trading, equities lost steam late in the session, with the S&P 500 nearly erasing earlier gains that were driven by expectations meeting the latest inflation data.
As President-elect Trump readies for a second term, market optimism is growing, fueled by hopes for corporate tax cuts, regulatory rollbacks, and heightened infrastructure spending. However, unlike in 2016, elevated inflation could restrict the Fed’s flexibility to maintain low interest rates. The Federal Reserve remains cautious about cutting rates due to ongoing inflationary pressures.
Following Donald Trump’s election victory, U.S. markets responded with substantial enthusiasm, hitting record highs driven by expectations of pro-business policies including lower taxes, reduced regulation, and a focus on domestic economic growth.
U.S. major indexes closed another losing week, despite a recovery on Friday following a tech-led Halloween sell-off. Treasury yields surged to four-month highs amid modest job growth in October, and volatility held firm heading into Tuesday’s election
Markets held steady Wednesday, awaiting mega-cap earnings, upcoming inflation and jobs data, the Fed meeting, and elections.
The Nasdaq Composite hit a new intraday high, buoyed by tech sector strength, but closed just below its peak. Meanwhile, the S&P 500 and Dow Jones saw their first weekly losses in seven weeks.
The stock market recently faced challenges, ending the week with its worst losses in over a month. Rising Treasury yields and a strengthening U.S. dollar exerted downward pressure on stocks.
As of Friday’s market close, U.S. stocks completed their sixth consecutive week of gains, achieving a new record high. This rally has been fueled by strong corporate earnings results across multiple sectors, boosting investor confidence.
The U.S. economy remains resilient, fueled by strong corporate earnings and a solid labor market, but risks still loom ahead
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