Stocks fall as record rally cools

U.S. stocks retreated Friday, signaling a retreat from all-time highs as unrest in Europe rattled nerves and Elon Musk’s pay victory propelled Tesla (TSLA) into the spotlight.

The Dow Jones Industrial Average (^DJI) fell about 0.5% to lead the declines, while the S&P 500 (^GSPC) lost 0.4%. The tech-heavy Nasdaq Composite (^IXIC) fell 0.3%.

Stocks are losing steam after the benchmark S&P 500 and Nasdaq closed at a record high for the fourth straight day, boosted by strength in tech. Both indexes are still on track for weekly gains.

An unexpected slowdown in wholesale price pressures gave cheer to investors betting on two interest rate cuts this year, since the drop is expected to be reflected in the next PCE inflation figure monitored by the Federal Reserve.

Learn more: How does the labor market affect inflation?

But the Fed this week reduced its rate cut forecast from three to one in 2024, leaving the market in uncertainty and leaving stocks vulnerable to changes in sentiment. Strength in tech names drove broader gains, helping the S&P 500 and Nasdaq notch weekly gains — at least for now. But the Dow faces a loss for the week as questions linger about the extent of this year’s rally.

Meanwhile, Tesla shares rose about 2% Friday morning after shareholders reapproved CEO Elon Musk’s $56 billion pay package. Despite opposition from some large investors, 77% of votes were cast in favor, the electric vehicle maker said.

The fall in European stocks (^STOXX), which were heading for their worst week since October, weighed on morale. Investors are worried about the consequences on markets if the far right makes political gains or even wins early elections in France.

In the personal moving sector, shares of Adobe (ADBE) jumped 15% after an optimistic projection of AI sales from maker Photoshop.

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  • Stocks fall as European markets retreat

    U.S. stocks fell from all-time highs as investors reacted to nervousness in Europe, where France’s upcoming snap elections could bring gains to the country’s far-right party.

    The Dow Jones Industrial Average (^DJI) fell about 0.5%, while the S&P 500 (^GSPC) lost 0.3%. The tech-heavy Nasdaq Composite (^IXIC) fell 0.2%.

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