Nasdaq Ends the Week 5% Lower As Stocks Retreat on FED Slowdown

Nasdaq opened the week above 21,000 points after the rally on the Trump Trade last week, however this week it fell 5%, ending closer to $20,000 points as the FED decided to announce a slowdown in rate cuts, following the better economic performance from the US, as well as Donald Trump’s victory, even though Powell said that the FED doesn’t care which party wins elections.

However, this retrace in the US stock markets might be a good opportunity to look for longs, but not just yet. We have to see how markets open next week and look for a bullish reversing signal before going long on the S&P 500 or the Nasdaq index. The market’s expectation of a December FED rate cut has dropped significantly, falling from 85% on Monday to just 55% now. This shift has unsettled the bond market, which reacted poorly to retail sales data—primarily due to negative revisions, despite weaker-than-expected numbers.

For the first time since May, 10-year Treasury yields reached 4.50%. Commodities struggled, with oil prices dropping $2 and broader commodity markets showing little improvement. The S&P 500 took a hit, losing around 70 points today, equating to a daily decline of 1.2 and a weekly fall of 2%.

Nasdaq Chart Weekly – Giving Back Some Of Last Week’s Gains

The day proved challenging for key sectors, particularly technology and consumer cyclicals. The tech sector faced notable pressure, with Microsoft (MSFT) down 2.2%, Adobe (ADBE) down 2.3%, and Salesforce (CRM) losing 1.9%. Semiconductor stocks were volatile as Nvidia (NVDA) fell 1.5% and Advanced Micro Devices (AMD) dropped 2.25%. In the consumer cyclical space, Amazon (AMZN) declined by nearly 3%, reflecting a cautious sentiment in the market.

Closing Prices for Main US Indices for the Week

• S&P 500: -1.3%
• Nasdaq Composite: -2.2%
• Dow Jones Industrial Average (DJIA): -0.7%
• Russell 2000: -1.5%
• Toronto TSX Composite: -0.7%

Weekly Changes

• S&P 500: -2.1%
• Nasdaq Composite: -5%
• Russell 2000: -4.0%
• Toronto TSX Composite: +0.5%

Uncertainty surrounding tariffs and elevated price-to-earnings ratios has cast a shadow over the U.S. election’s aftermath. Much of the rally seen after election day has faded, with the Nasdaq experiencing substantial losses and the S&P 500 nearing the gap from its initial post-election surge. Investors are closely watching how the administration’s key campaign promises—reflected in Trump’s cabinet picks—are shaping policy. Among these, the proposal of 60% tariffs on China and the Federal Reserve’s cautious tone are contributing to the ongoing market decline.

After showing strength yesterday, European equities reversed course today as well, although they performed better than the US markets, though ending lower for the week as well.

Closing Changes for Main European Bourses on Friday and for the Week

• Stoxx 600 -0.8%
• German DAX -0.1%
• France CAC -0.5%
• UK FTSE 100 -0.2%
• Spain IBEX +0.7%
• Italy’s FTSE MIB -0.5%

On the week:

• Stoxx 600 -0.7%
• German DAX flat
• France CAC -0.9%
• UK FTSE 100 -0.1%
• Spain IBEX +0.6%
• Italy’s FTSE MIB +1.1%

S&P 500 Live Chart