The stock market “Trump Bump” appears to be over after his victory over Vice President Kamala Harris in last week’s election.
On Friday, the market fell to its lowest point since the election, with Dow Jones Industrial Arage above 300 points and below about 0.7 percent points. It has dropped more than 800 points, or about 1.9% since peaking on Monday.
The Dow Jones average jumped 1,500 points, or about 3.57 percent points, on Wednesday after Trump’s victory, as he responded positively to Trump’s plans when he returned to the White House in January and actively responded to Trump’s plans to emphasize taxation.
Newsweek has emailed Trump’s transition team for comments.
Friday’s decline comes after two important economic developments that could affect traders’ decisions.
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On Thursday, Federal Reserve Chairman Jerome Powell said the central bank is not in a hurry to implement further interest rate cuts.
“The economy isn’t sending a signal that we need to hurry down the rate,” Powell said. “The strength we see in the economy now gives us the ability to approach our decisions carefully.”
Two days after the election, the Fed implemented a quarter-point cut, cutting it to 4.5-4.75%. In September, the Fed reduced its key rate. This was 23 years high, 4.75-5% from half point. The cuts are seen as a promising sign for the economy as inflation has declined since its peak in 2022.
The Fed has sought to achieve an economic “soft landing” as the economy recovers from the Covid-19 pandemic. These interest rate cuts are seen by economists as signs that the Fed is optimistic about the country’s economic future.
According to CME FedWatch, Fed officials showed in September that the central bank expected four fee cuts in 2025.
It also appeared that the market responded to Trump to order Robert F. Kennedy Jr. to lead the Department of Health and Human Services late Thursday night. Previous comments on Kennedy’s vaccine attracted the outrage of scientists and public health experts who said they pushed misinformation about vaccination.
Kennedy says he’s not opposed to all vaccines and won’t ban them. However, he told podcaster Rex Fridman that he “has no safe and effective vaccine.”
When the stock market opened on Friday morning, vaccine-producing companies saw stocks decline. Pfizer stocks fell 4.3%, while Modern fell 3.1%. Novavax stock saw a 2.8% drop.
The economy has been a central campaign issue for voters this year, and their critical views have helped bring Trump to the entire finish line.
The exit poll showed that the majority of Americans were unhappy with the direction of the country. Harris faced criticism of the Biden administration’s handling of economy and inflation, but Democrats said President Joe Biden’s signature legislative victory, the Inflation Reduction Act, helped lower inflation.
