Stock Markets Now Lower Than Before Trump Victory Bump

Stocks have lost the so-called "Trump Bump" they had experienced since election day.

The markets surged around the election as investors saw a greater likelihood of a pro-business regulatory environment with Republicans in charge of Congress and the White House.

The Dow Jones Industrial Average closed Friday at 41,938.45. That is down from the 42,221.88 that the stock average hit the day Donald Trump was reelected to the White House and the 43,729.93 it hit the day after the election.

The broader-based S&P 500 is still slightly higher but close to losing all gains since election day. The index closed on Friday at 5,782.76. It closed on election day at 5,782.76 and 5,864.89 it closed the following day.

The tech-heavy NASDAQ is the best performer of the large indexes. It is still up several hundred points since the election. It closed at 19,161.63 on Friday up from the Nov. 5 close of 18,439.17 and close of 18,772.76 on the day after the election.

The markets were set for more potential losses on Monday. Stocks on all three indexes were down in pre-market trading.

The markets are facing several headwinds.

The economy is growing at a faster than expected pace and companies are still hiring more workers.

Inflation remains elevated over the 2% level that the Federal Reserve hopes to achieve. That means that interest rate cuts appear to be on hold for the months ahead.

Another concern is the impact expected tariffs under the Trump administration could have on the economy.

Federal Reserve bond yields have shot up in recent weeks. That's also bad news for the housing market. 30-year mortgages are now above 7% for many new potential borrowers. That could continue to stifle demand and make current owners reluctant to sell if they need another mortgage to buy a new home.