Wall Street sobers up

After a post-election risk-taking binge, stock investors sobered up this week as Jerome Powell’s go-slow message on interest-rate cuts cooled the Trump trade euphoria that drove Wall Street to records. With the world’s most important central banker in no hurry to ease monetary policy thanks to a still-robust labor market and strong economic data, bond yields once again rose and dragged stocks lower in their wake. Down 2% over five sessions, the S&P 500 erased half of its trough-to-peak gains since the election. Combined with losses in corporate credit and commodities, the week rounded out a pan-asset retreat that by one measure was the worst in 13 months. After all the cheering from Wall Street on Donald Trump’s behalf, worry may have begun to set in. The Republican’s fiscal agenda threatens to rekindle inflation and may force the Fed to cut interest rates less than expected. Indeed, stocks fell on Friday, closing out the worst week in more than two months. Here’s your markets wrap. —David E. Rovella

Oil snapped its three-day relief rally as traders reacted to what looks like an oversupplied market in the coming months. West Texas Intermediate fell 2.4% to settle cents above $67 a barrel, the lowest close since September. Brent settled barely above $71. Bad news for oil traders is often good news for everyone else, and not just because of lower prices at the pump. A big part of the decline may be related to renewed ceasefire talks in the Middle East and the prospect that Russia may end its war on Ukraine with a deal.

German Chancellor Olaf Scholz held a phone call Friday with Kremlin leader Vladimir Putin, urging him to enter talks to end his war. The call was the first direct communication between the leaders in almost two years and comes as a Moscow-friendly administration prepares to take over US foreign policy. With the exit of President Joe Biden, a champion of Ukraine, more observers are looking to a potential negotiated settlement in which Russia retains Ukrainian territory.

Chinese leader Xi Jinping warned against any efforts to unwind globalization in his first major remarks since Trump won the US presidential election after threatening to impose tariffs as high as 60%. The Chinese leader is seeking to portray himself as a champion of economic globalization while attending the APEC and Group of 20 summits in South America this week, a strategy he deployed during Trump’s first term.

More good news for Donald Trump’s right-hand man and aspiring “American oligarch.” SpaceX is said to be in early discussions to sell insider shares that could boost the value of Elon Musk’s rocket and satellite company to around $255 billion. That would be a premium to the company’s previous valuation of about $210 billion and would cement SpaceX’s status as the most valuable private US company. The secondary, where employees and some early shareholders can sell shares, provides investors in privately held SpaceX a new way to profit off of Musk’s deep ties with Trump and the windfalls across the billionaire’s business empire.

This year was already a landmark one for exchange-traded funds, but as of Friday the ETF universe can add another superlative: biggest annual inflows on record. The insatiable appetite for the investor-friendly wrapper, an all-time high number of product launches and a relentless bull market fueled by Trump’s victory have helped push total net inflows into US ETFs past $913 billion. That beats 2021’s record haul with still one more month to go.

Home service software business ServiceTitan is said to be planning to file as soon as next week for an initial public offering, as Silicon Valley investors watch carefully for a change in the IPO landscape after several slow years for venture-backed offerings. The Glendale, California-based company is aiming to go public before the end of the year. Though valued at as much as $9.5 billion during the 2021 boom, the company had a valuation of about $7.6 billion after a 2022 funding round.

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