11/12/24 Market Recap: Stocks Pull Back as “Trump Trade” Momentum Slows

After the recent surge sparked by Trump’s presidential victory, U.S. stocks took a breather today, pulling back slightly across major indexes. The S&P 500 fell 0.3% from its recent high, closing at 5,983.99, while the Dow Jones Industrial Average dropped 0.9%, or 382 points, to 43,910.98. The Nasdaq composite dipped 0.1%, and the Russell 2000, which tracks smaller U.S. companies, fell by a more noticeable 1.8%, reflecting a softening in smaller stocks following their post-election rally. Small stocks are considered by investors to be among the largest benefactors of a second Trump presidency.

In the bond market, yields jumped, adding some pressure on stocks. Notably, Tesla—a stock closely associated with Trump through recent appearances and interactions with Elon Musk—saw its first decline since before Election Day, reflecting a broader tempering of the "Trump trade."

What This Means for Your ETF and Index Fund Strategy

With the market shifting from rapid gains to slight pullbacks, it’s a good time to evaluate your investments in exchange-traded funds (ETFs) like QQQ and SPY. For instance, QQQ stock price, which tracks the tech-heavy Nasdaq-100, experienced only a modest dip, highlighting the sector’s relative resilience. ETFs and index funds can help you capture these gains while keeping your portfolio diversified, balancing between growth potential and risk management.

It is 6pm. Do You Know How Your Index ETFs Performed?

• SPY Stock Price: Closed at $596.90, Down $1.86 for the day
• QQQ Stock Price: Closed at $512.91, Down $.93 for the day
• DIA Stock Price: Closed at $439.39, Down $3.62 for the day

The Advantage of Index Rebalancing

As market conditions shift, Index Rebalancing can be a valuable strategy to keep your portfolio aligned with your financial goals. By rebalancing regularly, you can capture gains from strong performers and reinvest in areas poised for potential growth, all while managing exposure to market volatility. With the SPY and QQQ stock prices reflecting different sector responses to economic changes, rebalancing offers a logical approach to optimizing your ETF portfolio.

Markets change and so do emotions. Markets cannot rise forever. Having a plan in place for when markets fall is a wise approach. Index Rebalancing accomplishes this for you and removes emotions from the decision-making process.

Bottom Line

With today’s market cooling off slightly, staying disciplined with Index Rebalancing can keep your portfolio on track. This strategy provides a balanced approach to handle the ups and downs of the “Trump trade” and broader market moves, offering a steady path to growth in an unpredictable environment.