Wall Street fluctuates amid strong economy and concerns

Wall Street dips amid mixed macro data, strong dollar, and Tesla’s drop; investors await key employment and earnings reports.

Wall Street experienced volatile trading on Thursday, reversing earlier gains as investors confronted a mix of strong labour market data, a rising dollar, and falling Tesla shares.

All three major U.S. stock indexes ended lower after an initial rally.

Tesla shares fell 6.5% following the announcement of the company’s first annual decline in deliveries, with discounts failing to boost demand for its older electric vehicles.

Additionally, the Labor Department reported a decrease in initial and continuing unemployment benefit claims, reinforcing evidence of a robust job market. This may influence the U.S. central bank’s decision on maintaining interest rates in its upcoming policy meeting.

Despite uncertainties surrounding interest rate changes by the Federal Reserve, incoming Trump administration policies, and geopolitical tensions, market participants remained focused on the strength of the U.S. economy.

Wall Street’s major indexes achieved double-digit growth in 2024, with the S&P 500 marking its best two-year performance since 1997-1998. This upswing was propelled by the Federal Reserve’s first interest rate cuts in over three years, the ongoing AI boom, and the anticipation of business-friendly policies from the new administration.