U.S. stocks edged lower Friday as some investors grew concerned that President-elect Joe Biden’s $1.9 trillion Covid-19 relief plan could lead to higher taxes.
The S&P 500 fell 0.3%, indicating the benchmark index may decline for a second day. The Nasdaq Composite picked up 0.2%, while the Dow Jones Industrial Average slipped 0.6%, about 180 points.
The S&P 500 is on track to end the week lower, erasing some of the gains made in early January when the gauge rallied to a record high. Markets have for weeks cheered Democrats’ plans to expand government spending and bolster the economic rebound. But the size of Mr. Biden’s plans, laid out late Thursday, served to check some of that optimism.
“The magnitude obviously was surprising on the upside,” said Wei Li, head of investment strategy for BlackRock ’s exchange-traded fund and index investments for Europe, Middle East and Africa. “With the Senate majority, [taxes] could be coming in the medium term and that is something the market has to assess as well.”
Ahead of the opening bell, JPMorgan Chase shares edged down less than 1%. The bank on Friday reported its highest-ever quarterly profit, though its full-year earnings fell 20%. Shares of Wells Fargo fell 3.7% after its revenue fell more than forecast, with lower interest rates weighing on net interest income. Citigroup slid over 2% as it reported fourth-quarter results.