Big Number
$458 billion: That’s the total market value lost by the six most valuable U.S. companies—Nvidia, Apple, Microsoft, Amazon, Alphabet, and Meta—on Friday, according to YCharts. Nvidia and Amazon alone each saw their market capitalization drop by over $90 billion. The tech sector selloff followed signals from Federal Reserve officials suggesting interest rates might not be cut further next month, leading investors to shy away from rate-sensitive tech stocks.

Tangent
Healthcare stocks also took a hit Friday, with the S&P 500’s healthcare sector falling 1.9%. Pfizer’s stock dropped 4%, continuing a slide that began late Thursday after Trump appointed vaccine skeptic Robert F. Kennedy Jr. as the Secretary of Health and Human Services.

Crucial Quote
“Trump’s recent unorthodox cabinet picks,” along with a stronger dollar hitting a 12-month high and a rise in the 10-year U.S. Treasury yield from 4.29% to 4.41% post-election, “are prompting investors to reassess the potential impacts of the incoming Republican government,” wrote Tom Essaye, founder of the Sevens Report, in a Friday client note.

Why Stocks Are Down
While Wall Street’s post-election sentiment remains largely positive, Bank of America analysts caution against excessive optimism as the incoming Trump administration and Republican-controlled Congress could bring major policy shifts. Savita Subramanian, the bank’s chief equity strategist, warns of “dangerously bullish” investor behavior, citing record-low mutual fund cash reserves and a record high percentage of consumers expecting stock price increases. Bank of America economists led by Aditya Bhave added that risks to their growth forecasts are “unusually large,” given the potential for sweeping policy changes under unified GOP leadership.

Contra
Despite these concerns, Bank of America maintains a year-end target of 6,000 for the S&P 500, implying a modest 2% gain from Friday’s 5,860. However, the projection falls short of the record high of 6,017 set earlier in the week. Wall Street broadly views Trump’s presidency as a positive market catalyst, with Goldman Sachs strategists predicting that proposed corporate tax cuts under Trump could boost S&P company earnings by 4% annually.