Stocks Pause After Postelection Rally
The stock market took a breather on Tuesday, with major indexes closing lower after a postelection rally. The S&P 500 slipped 0.29% to close at 5,983.99, while the Nasdaq Composite fell 0.09% to 19,281.40. The Dow Jones Industrial Average pulled back 382.15 points, or 0.86%, to finish the session at 43,910.98.
The selloff was broad, with around three-quarters of NYSE stocks and 63% of Nasdaq stocks declining. Small-cap stocks, as measured by the Russell 2000 index, were hit particularly hard, falling 1.4% after running up in the postelection rally. Analysts attributed the pullback to “unwind risks” building in the market due to extended positioning.
Despite the retreat, the market remains near record highs. The number of new 52-week highs reached 177 on the NYSE and 257 on the Nasdaq, compared to 66 and 141 new lows, respectively. The postelection rally has been fueled by expectations of less regulation and a potential boost to small-cap companies under a second Trump term. However, some caution has crept in as investors await key economic data, including a crucial inflation report due on Wednesday.
