Stock market today: Dow, S&P 500, Nasdaq slide as Powell says Fed in no ‘hurry’ on rate cuts

Vaccine stocks slipped into the close on Thursday afternoon after Politico reported Donald Trump will name anti-vaccine activist Robert F. Kennedy Jr. to lead the Department of Health and Human Services.

Shares of Moderna (MRNA) and Novavax (NVAX) both fell more than 5% following the report while fellow vaccine maker Pfizer (PFE) also slid more than 2.5%.

Yahoo Finance’s Jennifer Schonberger reports:

Federal Reserve Chair Jay Powell said the central bank does not need to be “in a hurry” to lower interest rates due to the economy’s strength, and that the Fed would be “watching carefully” to make sure certain inflation measures stay within an acceptance range.

“The economy is not sending any signals that we need to be in a hurry to lower rates,” Powell said in prepared remarks for a speech in Dallas.

“The strength we are currently seeing in the economy gives us the ability to approach our decisions carefully.”

Read more here.

Another Trump trade is on the move.

Shares of government contractors drifted lower on Thursday amid speculation that the new “DOGE” (Department of Government Efficiency) will be looking for areas to cut back on government spending. It’s unclear exactly what action the newly formed department led by Elon Musk and Vivek Ramaswamy will take.

But Musk has already suggested eliminating hundreds of existing agencies and cutting the more than $6 trillion annual budget by $2 trillion.

And the market appears to be betting that some of those spending cuts will impact publicly traded government contractors. Shares of Science Applications International Corporation (SAIC), Booz Allen Hamilton (BAH), KBR (KBR), and Parsons Corporation (PSN) were all off 6% or more on Thursday.

Interestingly, Lockheed Martin (LMT) stock fell a more measured 3%, perhaps serving as a reminder for investors that not all businesses that work with the government are created equal. And for now, the market doesn’t see big cuts coming to defense spending with Lockheed Martin.

October inflation readings out this week have shown little progress toward the Fed’s 2% inflation target, putting into question how deeply the Federal Reserve will cut interest rates in 2025.

On Wednesday, the “core” Consumer Price Index (CPI), which strips out the more volatile costs of food and gas, showed prices increased 3.3% for the third consecutive month during October. Then, on Thursday, the “core” Producer Price Index (PPI) revealed prices increased by 3.1% in October, up from 2.8% the month prior and above economist expectations for a 3% increase.

Taken together, the readings are adding to an overall picture of persistent, sticky inflation within the economy. Economists don’t see the data changing the Fed’s outlook come December. And markets agree with the CME FedWatch Tool currently placing a nearly 80% chance the Fed cuts rates by 25 basis points at its December meeting.

But the lack of recent progress on the inflation front could prompt the Fed to adjust its Summary of Economic Projections (SEP), which had forecast the central bank would cut interest rates four times, or by one percentage point in total, throughout 2025.

“PPI won’t decisively alter the Fed’s easing bias, but it makes charting the policy outlook murkier,” Nationwide financial market economist Oren Klachkin wrote in a note to clients today. “We anticipate 75 [basis points] of cumulative Fed easing in 2025, but risks seem to be tilting toward a more gradual pace of easing.”

Read more here.

President-elect Donald Trump’s administration is planning to eliminate the $7,500 tax credit provided to consumers, according to a report from Reuters.

Ford (F), General Motors (GM), and Tesla (TSLA) stock all moved lower following the report.

Bitcoin (BTC-USD) pared earlier gains, hovering above $88,00 per token by 12:30 p.m. ET.

The world’s largest cryptocurrency has been at the center of the Trump trade, which has catalyzed moves across a range of assets after Donald Trump’s White House win last week.

On Thursday morning, each token was trading around $91,000 after reaching new highs north of $93,000 in the prior session.

Year to date, bitcoin is up about 100%.

Yahoo Finance’s Alexandra Canal reports:

Disney (DIS) CEO Bob Iger doesn’t think the company needs to engage in mergers and acquisitions to compete in streaming.

“We don’t really need more assets right now, either from a distribution or from a content perspective, to thrive in [a] disruptive media world,” the executive told investors on the company’s fourth quarter earnings call Thursday morning.

“In a way, we’ve already consolidated,” he said, citing the acquisition of 21st Century Fox, announced in late 2017. “And while I think we’ll always look opportunistically at opportunities, as we’ve proven in the past, we certainly don’t shy away from those … We, in many respects, have already consolidated.”

Disney shares rose on Thursday after the entertainment giant issued better-than-expected guidance and quarterly results beat estimates.

Read more here.

Tapestry (TPR) shares soared on Thursday to an 11-year high after the parent of Coach and Capri Holdings (CPRI) called off its merger plans.

The fashion companies mutually decided to abandon their $8.5 billion tie-up, citing regulatory hurdles.

In a statement, Capri said that “the required closing condition of receiving necessary US regulatory approvals was unlikely to be met by the merger agreement’s outside date of February 10, 2025.”

Shares of Capri fell 2% while Tapestry stock jumped as much as 11%.

Yahoo Finance’s Alexandra Canal reports:

Disney (DIS) on Thursday reported fiscal fourth quarter earnings per share and revenue that topped Wall Street estimates, as its direct-to-consumer business built on recent momentum and swung to a profit.

Strong guidance for the next two years also fueled investor optimism, sending shares up over 10% in early trading following the results.

Read more here.

The major averages opened mixed on Thursday as investors awaited a speech from Fed Chairman Jerome Powell while assessing a Republican sweep in Congress.

The Dow Jones Industrial Average (^DJI) ticked up 0.2%, while the S&P 500 (^GSPC) gained slightly. The Nasdaq Composite (^IXIC) also rose 0.1%.

Republicans won control of the House on Wednesday, completing their 2024 election “trifecta.”

Investors have been watching a rising US Dollar Index (DX-Y.NYB) and the impacts it could have on the markets. Commodities like oil and gold, which are invoiced in dollars, have been under pressure in recent days.

Bitcoin (BTC-USD) held above $91,000 on Thursday morning after climbing past $93,000 in the prior session.

The world’s largest cryptocurrency has been at the center of the Trump trade, which has catalyzed moves across a range of assets after Donald Trump’s White win last week.

The token is up more than 30% since Election Day.

Initial jobless claims fell by 4,000 to their lowest level since May, at 217,000 for the week ending Nov. 9. The reading was less than the 220,000 claims expected by economists.