Wall Street experienced a sharp reality check this week as the post-election rally following Donald Trump's victory unraveled. Major indices fell in unison as investors reassessed the economic outlook in light of potential policy shifts.

Republicans secured a majority in the House of Representatives, marking a GOP sweep of Washington, D.C. and giving the incoming Trump administration significant leeway to enact economic policies.

Uncertainty looms large with the specter of higher tariffs and potential cuts to government spending, particularly given Trump's plan for the creation of the Department of Government Efficiency (DOGE), triggering turbulence across various sectors and markets.

In economic data, consumer inflation rose as expected in October, but producer inflation surpassed forecasts, raising some fresh concerns about the durability of the disinflationary trend heading into the year's final quarter.

Risk sentiment took a deeper hit on Thursday and Friday after Federal Reserve Chair Jerome Powell delivered unexpectedly hawkish remarks. Powell indicated the Fed is in "no hurry to lower rates," citing the strength of the U.S. economy, which allows policymakers to proceed "carefully."

As a result, expectations for a December interest rate cut have sharply diminished, with traders growing increasingly uncertain about the possibility of an easing move at the Fed's final meeting of the year.

The dollar marked its seventh consecutive week of gains, reaching levels last seen in October 2023. Bitcoin continued its remarkable ascent, surging to a peak of $93,500 on Wednesday before retreating slightly.

Tesla's 2025 Surge

According to a Benzinga survey, readers say Tesla Inc. (NASDAQ:TSLA)'s potential all-time highs in 2025 will be influenced by CEO Elon Musk's relationship with Trump, anticipating favorable policies and regulatory support that could boost the company's stock performance.

Musk Rejects Subsidies

Musk supports ending electric vehicle subsidies, asserting that Tesla can thrive without them. A former Tesla executive warned that removing these incentives could lead to a significant decline in EV adoption, potentially harming the broader industry.

Ford Reduces EV Production

Ford Motor Co. (NYSE:F) is cutting production of its electric Capri and Explorer models at the Cologne factory due to significantly lower-than-expected demand. This follows a recent pause in F-150 Lightning production, reflecting broader challenges in the EV market.

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