The stock market closed lower on Friday after hitting new records earlier in the session, as investors took some profits to end a solid week. The S&P 500 shed 0.3% to 6,101.24, reversing course after reaching a fresh intraday record. The Nasdaq slipped 0.5% to 19,954.30, and the Dow dropped 140.82 points, or 0.3%, to 44,424.25.
Last Friday, January 24, losses snapped the three major indexes’ winning streaks. Some mega-cap tech stocks that had previously driven the market to all-time highs began to decline, putting downward pressure on equities. Apple slid more than 3%, while Tesla fell more than 1%.
Despite last Friday’s retreat, excitement about President Trump’s pro-business policies has pushed risk assets higher this week as investors focused on his inauguration. Traders were also relieved that Trump has only threatened tariffs instead of taking formal action during his first few days in the White House. All three major averages posted their second straight positive week, signaling that the bull market is back in full force after December’s pullback.
Markets dip after intraday record high
The S&P 500 and Nasdaq each rose around 1.7% this week, while the Dow climbed 2.2%. In addition to hitting fresh intraday records this week, the S&P 500 notched a new all-time closing high on Thursday.
Trump announced on Thursday that he would “demand that interest rates drop immediately” when addressing world leaders in Davos, Switzerland. The president also said he would ask Saudi Arabia and other OPEC nations to lower the price of oil. Mark Malek, chief investment officer at Siebert, said, “So far, markets have reacted to every statement made by the President, even those that should not have any impact.
This shows that traders have not yet settled into their pace.”
Beyond politics, market participants monitored corporate news and earnings reports. Pfizer rallied more than 8% following positive news about a weight loss drug. Conversely, Texas Instruments sank more than 7% on weak earnings guidance.
This action comes ahead of a crucial week when attention will turn to significant technology earnings and the Federal Reserve meeting. According to CMEGroup’s FedWatch Tool, Fed funds futures are priced with a 98% chance that the central bank will leave interest rates unchanged.
