The Dow Jones Industrial Average declined 382.15 points, or 0.86%, to 43,910.98, the S&P 500 dropped 17.36 points, or 0.29%, to 5,983.99 and the Nasdaq Composite tumbled 17.36 points, or 0.09%, to 19,281.40
A gauge of global stocks dropped on Tuesday after gaining for five consecutive sessions while the dollar reached its highest level in more than six months as investors weigh the impact of U.S. President-elect Donald Trump’s likely path of policies.
Investors have flocked in to assets expected to benefit from Trump policies for his second term in office, after he pledged to impose high tariffs on imports from key trading partners, as well as lower taxes and loosen government regulations.
The S&P 500 has soared recently, partly driven by a jump in shares of banks, which are likely to benefit from a reduced regulatory burden. Domestically focused small-cap stocks have climbed on expectations for less competition from tariffs and lower tax rates, with the Russell 2000 jumping to a three-year high on Monday.
Bitcoin, the world’s biggest crypto currency, has soared nearly 30% since the November 5 election, surging toward the $90,000 mark. Trump is seen as a proponent of crypto currencies, promising during his campaign to make the US the “crypto capital of the planet.”
U.S. stocks have rallied since the election, but closed marginally down on Tuesday after each of Wall Street’s three major indexes ended at record levels in the earlier session.
But concerns that Trump’s policies could cause a re-emergence of inflation after a long battle to lower price pressures following the COVID-19 pandemic have pushed U.S. Treasury yields and the dollar higher. Markets will get the latest inflation reading on Wednesday in the CPI for October.
Given the all-time highs we have been hitting over recent days and we came into today at all-time highs, it is somewhat of a profit-taking move and consolidation from investors today, said Russell Price, chief economist at Ameriprise Financial Services.
Markets were down based on perceptions of what might occur with the tariff action, he said.
The Dow Jones Industrial Average declined 382.15 points, or 0.86%, to 43,910.98, the S&P 500 dropped 17.36 points, or 0.29%, to 5,983.99 and the Nasdaq Composite tumbled 17.36 points, or 0.09%, to 19,281.40.
