U.S. stock market/ vaccine stocks fall/ tech sector slump/ Trump health policies/ retail sales October 2024/ Newslooks/ NEW YORK/ J. Mansour/ Morning Edition/ U.S. stocks fell Friday, with the S&P 500 dropping 0.7% as vaccine makers and tech stocks slid. Shares of Pfizer, Moderna, and Novavax tumbled after President-elect Trump floated Robert F. Kennedy Jr. as a possible Health Secretary pick. Strong retail sales data highlighted consumer resilience, but broader concerns about inflation and federal deficits weighed on sentiment.
U.S. Markets Retreat: Trump’s Health Secretary Pick Jolts Vaccine Makers
Stock Market Today: Wall Street Falls Amid Vaccine, Tech Declines
Market Performance
- Indices in Decline: The S&P 500 fell 0.7%, the Dow Jones slipped 141 points (0.3%), and the Nasdaq dropped 1.2%.
- Vaccine Makers Hit: Pfizer (-4.3%), Moderna (-3.1%), and Novavax (-2.8%) slid on fears of policy changes under a potential Robert F. Kennedy Jr. appointment.
- Tech Under Pressure: Applied Materials fell 9.1% despite exceeding earnings expectations, as its revenue forecast disappointed investors.
Deep Look
Wall Street experienced a downturn on Friday as last week’s post-election rally lost steam, with tech and vaccine stocks leading the decline. Concerns over potential policy shifts under President-elect Donald Trump further weighed on the market.
Vaccine Makers React to Trump’s Cabinet Plans
Shares of Pfizer, Moderna, and Novavax fell sharply after Trump announced his intention to nominate Robert F. Kennedy Jr., a known anti-vaccine advocate, as Secretary of Health and Human Services. The announcement rattled the healthcare sector, prompting concerns about potential policy reversals in vaccine advocacy and funding.
Tech Stock Struggles
Applied Materials, a major supplier for the semiconductor industry, dropped 9.1%. Despite reporting better-than-expected quarterly profits, its revenue forecast for early 2025 fell short of analyst expectations. The miss highlights the challenges faced by tech companies as they navigate slower growth and rising costs.
Consumer Spending Remains Resilient
Retail sales rose in October, underscoring strong consumer demand. Shoppers spent more than expected, buoying optimism about the economy’s resilience. However, when auto purchases were excluded, retail sales fell short of projections, tempering the enthusiasm.
Brian Jacobsen, chief economist at Annex Wealth Management, noted that consumer spending could see a post-election lift as households and businesses resume delayed purchases.
Mixed Economic Data
A separate report showed manufacturing activity in New York state rebounded strongly, beating expectations after October’s contraction. The data painted a mixed picture of the economy’s health as markets adjusted to Trump’s election win and its implications for trade, regulation, and fiscal policy.
Inflation and Federal Deficits Loom
Treasury yields rose on Friday, reflecting concerns over the economic impact of Trump’s policies, including potential increases in federal deficits and inflation. The 10-year Treasury yield climbed to 4.48% from 4.44% the previous day, while the two-year yield held steady at 4.36%.
The Federal Reserve’s recent decision to cut interest rates twice this year has bolstered markets, but Fed Chair Jerome Powell cautioned against further reductions, saying, “The economy is not sending any signals that we need to be in a hurry to lower rates.”
Global Markets
- UK Growth Slows: London’s FTSE 100 traded flat after data showed weaker-than-expected GDP growth of 0.1% in Q3, down from 0.5% in the previous quarter.
- Japan Shows Strength: Tokyo’s Nikkei 225 gained 0.3%, buoyed by faster GDP growth despite a recent rate hike by the Bank of Japan.
Key Takeaways for Investors
- Market Sentiment: The S&P 500 remains up nearly 24% for the year, but high valuations are sparking caution.
- Policy Concerns: Trump’s proposed Cabinet picks and fiscal policies are creating uncertainty in healthcare and tech sectors.
- Economic Resilience: Strong consumer spending and rebounding manufacturing indicate a solid economic foundation, though inflation and federal deficits remain concerns.
