By Lisa Pauline Mattackal and Purvi Agarwal
(Reuters) -Wall Street’s main indexes fell on Tuesday as investors booked profits following post-election gains over the past few days, while focus moved to key inflation data later in the week.
Some of the stocks expected to perform well under Donald Trump’s presidency gave back gains. EV maker Tesla (NASDAQ:), which has soared nearly 40% since Nov. 5, fell 3.4%.
The consumer discretionary, materials and utilities sectors fell more than 1% each.
The small-cap fell 1.3% after the index closed at a three-year high on Monday. Trump Media & Technology Group’s shares were down 8.3%.
Some crypto stocks eased as bitcoin slipped after its record run. miners MARA Holdings and Riot Platforms (NASDAQ:) fell 2.7% and 5.1%, respectively.
The three major indexes had rallied to record highs since the election as investors expect President-elect Trump’s proposed tax cuts and prospects of easier regulatory policies to help equities.
“Given how every single day since the election the market has done so well, it’s not unexpected for us to see a pullback this week,” said Quincy Krosby, chief global strategist for LPL Financial (NASDAQ:).
The fell 209.48 points, or 0.47%, to 44,083.65, the lost 16.33 points, or 0.27%, to 5,985.02, and the lost 29.03 points, or 0.15%, to 19,269.73.
Focus will now be on Wednesday’s consumer price inflation data, followed by producer prices inflation and retail sales data through this week, that will provide direction to the U.S. Federal Reserve’s policy path.
Markets have already dialed back expectations for interest rate reductions over the next year, given strong economic data and the possible inflationary impact of some of Trump’s policies.
“There’s heavy concentration on the inflation data … to determine whether the Fed may pause rate cuts at their December meeting,” Krosby said.
Traders are still pricing in a 65% chance of a 25-basis point interest rate cut at the Fed’s December meeting, according to CME FedWatch.
The U.S. central bank is ready to respond if inflation pressures rise or the job market weakens, Richmond Fed President Thomas Barkin said.
Fed officials Neel Kashkari and Patrick Harker are expected to speak later in the day.
The blue-chip Dow was weighed down by declines in healthcare and financial stocks, including UnitedHealth (NYSE:) and Goldman Sachs.
Home improvement retailer Home Depot (NYSE:) slipped 0.5%, despite forecasting a smaller drop in annual same-store sales.
Biotech firm Novavax (NASDAQ:) dropped 3.7% after cutting its annual revenue forecast due to lower-than-expected sales of its COVID-19 vaccine.
Honeywell (NASDAQ:) hit a record high and was last up 2.6% after activist investor Elliott Investment said it has built a stake worth more than $5 billion in the industrial conglomerate.
Declining issues outnumbered advancers for a 3.5-to-1 ratio on the NYSE and a 2.27-to-1 ratio on the Nasdaq.
The S&P 500 posted 43 new 52-week highs and 13 new lows, while the Nasdaq Composite recorded 167 new highs and 93 new lows.
