Wall Street Rally May Come to Abrupt Halt Facing Chaotic U.S. Presidential Administration

Barry Adams
23 Jan, 2025
New York City

Wall Street indexes struggled to stay above the flatline as investors reviewed the latest batch of mixed earnings and braced for the chaotic new U.S. president's administration. 

The S&P 500 index and the Nasdaq Composite hovered near record highs amid ongoing economic strength despite the expected chaotic administration of the newly elected president.

Market participants are overlooking the narrow majority of the Republican Party and a lack of a coherent plan to trim the elevated federal government debt and looming tariffs.

Moreover, investors are overlooking the resurgent inflation, largely driven by possible increases in tariffs on imported goods paid by the U.S. consumers, forcing the Federal Reserve to keep higher interest for longer.

 

U.S. Indexes and Treasury Yields

The S&P 500 index declined 0.6% to 6,082.93, the Nasdaq Composite eased 0.4% to 19,921.11, and the Russell 2000 index edged down 0.6% to 2,289.44.

The yield on 2-year Treasury notes edged higher to 4.31%, 10-year Treasury notes increased to 4.65%, and 30-year Treasury bonds rose to 4.87%.

WTI crude oil increased $0.47 to $75.88 a barrel, and natural gas prices edged higher by $0.08 to $4.04 a thermal unit.

Gold decreased by $10.89 to 2,744.27 an ounce, and silver edged down by $0.59 to $30.17.

The dollar index, which weighs the US currency against a basket of foreign currencies, increased by 0.13 to 108.30 and traded at a two-year high.

 

U.S. Stock Movers

Electronic Arts traded down 11.6% to $125.90 after the video game publisher estimated lower-than-expected revenue in the current fiscal year. 

Alaska Air Group Inc. gained 2.9% to $69.33, and the discount airline estimated loss in the current quarter to shrink on robust travel demand. 

GE Vernova Inc dropped 1% to $426.68 after the power company posted strong fourth-quarter results.

American Airlines Group plunged 9.7% to $16.85 after the company issued cautious outlook for the current quarter. 

Revenue and earnings surpassed market expectations in the fourth quarter, but the international airline estimated an adjusted loss per share between 20 cents and 40 cents in the current quarter, higher than expected by Wall Street analysts.