Stock market today: Stocks tumble as record-setting rally cools

US stocks pulled back on Friday, signaling a retreat from all-time highs as European turmoil rattled nerves and Elon Musk’s pay package win thrust Tesla (TSLA) center stage.

The Dow Jones Industrial Average (^DJI) sank about 0.5% to lead the declines, while the S&P 500 (^GSPC) shed 0.4%. The tech-heavy Nasdaq Composite (^IXIC) dropped 0.3%.

Stocks are losing steam after the benchmark S&P 500 and the Nasdaq nailed record closes for the fourth day in a row, boosted by strength in techs. Both indexes are still on track for weekly gains.

A surprise cooling in wholesale price pressures gave heart to investors betting on two interest-rate cuts this year, since the decline is likely to be reflected in the coming PCE inflation reading watched by the Federal Reserve.

Read more: How does the labor market affect inflation?

But the Fed this week dialed down its projected rate cuts from three to one in 2024, keeping the market guessing and leaving stocks vulnerable to shifts in mood. Strength in technology names has driven broader gains, setting up the S&P 500 and the Nasdaq for weekly wins — for now, at least. But the Dow faces a loss for the week, as questions persist about the breadth of this year’s rally.

Meanwhile, Tesla shares were up around 2% in Friday morning after shareholders re-approved CEO Elon Musk’s $56 billion pay package. Despite opposition from some large investors, 77% of votes were cast in favor, the EV maker said.

Weighing down spirits was a slump in European stocks (^STOXX), which were headed for their worst week since October. Investors are concerned about the fallout for markets if the far right makes political gains or even wins France’s snap election.

In individual movers, Adobe (ADBE) shares jumped 15% after an upbeat AI sales projection from the Photoshop maker.