Wall Street Drifts as 'Trump Trade' Momentum Slows

U.S. stocks slipped on Tuesday as the post-election “Trump trade” rally that has energized Wall Street began to lose some steam.

Following Donald Trump‘s presidential victory, investors rushed to buy into stocks they expected to benefit from his policies, but that surge now appears to be cooling.

Shares in Trump Media & Technology Group, the stock perhaps most tied to Trump’s public appeal, took a sharp hit, falling 8.6%.

Tesla—run by Trump ally Elon Musk—declined by 2%, and was on track for its first loss since before Election Day last week.

The automaker’s shares increased 8.2 percent to $321.22 on Friday, pushing its valuation beyond $1 trillion for the first time in over two years.

The S&P 500 edged down 0.2% after hitting a record high, while the Dow Jones Industrial Average dropped 139 points, or 0.3%, and the Nasdaq composite remained mostly flat.

Investors initially flocked to stocks on the expectation that Trump’s push for lower taxes and pro-business policies would boost U.S. economic growth.

Trump’s policies, including his endorsement of tariffs and other inflationary measures, could push both government debt and economic growth higher.

Smaller stocks, in particular, enjoyed a strong rally on hopes they’d benefit from Trump’s “America First” focus, but those gains moderated Tuesday, with the Russell 2000 index of smaller companies slipping 0.7%.

Some Companies Bucked the Trend

Live Nation Entertainment surged 3.5% after reporting stronger-than-expected profits, citing high global demand for concerts, with fans spending more on tickets.

Tyson Foods also rose 9.9% after beating analyst forecasts and raising its dividend, signaling a strong performance in the beef, chicken, and pork markets.

Home Depot, despite surpassing profit estimates, saw a slight drop of 0.7% as it faces reduced consumer spending.

Meanwhile, fertilizer producer Mosaic fell 6.5% after missing quarterly profit and revenue expectations.

Cryptocurrency Rises Then Falls

The cryptocurrency market also saw big moves, with Bitcoin reaching an all-time high before receding.

Embraced by Trump as part of his vision for making the U.S. a “crypto capital,” Bitcoin briefly hit $89,995, before settling around $86,000.

The digital currency started the year below $43,000.

In the last 24 hours, the cryptocurrency overtook silver to become the world’s eighth largest asset, reaching a market capitalization of $1.752 trillion and narrowly surpassing silver’s $1.726 trillion.

Treasury Holds Strong

In the bond market, Treasury yields climbed as markets reopened post-Veterans Day.

The 10-year Treasury yield increased from 4.31% on Friday to 4.37% on Tuesday.

Treasury yields have risen sharply since September, thanks to a stronger-than-expected economy, which investors hope will remain resilient as the Federal Reserve lowers rates to stabilize the job market.

An important update on U.S. inflation arrives Wednesday, with economists predicting a slight increase to 2.6% in October from 2.4% in September.

Analysts will focus on core inflation trends which are expected to hold steady at 3.3%, excluding volatile food and energy prices.

This article includes reporting from The Associated Press