U.S. stocks are pulling back from their record highs on Friday as caution creeps into financial markets heading into the weekend.
In early trading, the S&P 500 dipped 0.3% after hitting all-time highs every day earlier this week. The Dow Jones Industrial Average fell by 147 points, or 0.4%, at 9:35 a.m. Eastern time, while the Nasdaq composite dropped 0.3%.
Across the Atlantic, European stocks experienced sharper declines, influenced by recent election results on the continent. Gains by far-right parties have increased pressure on France’s centrist president, causing investor concern about potential delays in fiscal plans and France’s ability to manage its debt. Recent elections in Mexico, India, and other countries have also unsettled markets.
France’s CAC 40 plunged 2.4%, bringing its weekly loss to 6%, the worst in over two years. Germany’s DAX fell 1.2%.
In the U.S., Treasury yields eased as investors sought safer investments. The yield on the 10-year Treasury, which decreases when its price increases, fell to 4.22% from 4.25% late Thursday.
On Wall Street, shares of RH tumbled 14.6% after reporting a larger-than-expected loss for the latest quarter. The home furnishings retailer described the current housing market as “the most challenging in three decades.”
High mortgage rates have negatively impacted the housing market, as the Federal Reserve maintains its key interest rate at the highest level in more than 20 years. The central bank aims to slow the economy with high rates to curb inflation.
Despite these challenges, stocks have hit records as optimism grows that inflation is slowing enough to prompt the Federal Reserve to cut interest rates later this year. Big technology stocks continue to perform well, seemingly unaffected by economic conditions and interest rate trends.
Adobe surged 14.5% after reporting stronger-than-expected profits for the latest quarter.
In international markets, Asian indexes were mixed. Japan’s Nikkei 225 rose 0.2% following the country’s central bank decision to keep interest rates steady.
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