The major U.S. stock indexes retreated from their record highs this week, declining by approximately 1% to 3%. This pullback followed the previous week’s impressive rally of around 5% to 6% in response to the November 5 election.

The latest Consumer Price Index (CPI) showed a slight uptick, with October’s annual inflation rate rising to 2.6%, up from September’s 2.4%. While this result matched economists’ expectations, it highlighted the uneven progress toward the Federal Reserve’s long-term target of 2.0% inflation.

Yields on U.S. government bonds continued their upward trend, with the 10-year Treasury yield closing near 4.44% on Friday after briefly surpassing 4.50%—a level not seen in over five months. This is a significant rise from the mid-September low of 3.62%.

Comments from Federal Reserve Chair Jerome Powell and other officials suggested a possible slowdown in the pace of future rate cuts, with speculation that the Fed might pause rate reductions at its mid-December meeting. On Thursday, Powell noted, “The economy is not sending any signals that we need to be in a hurry to lower rates.”

U.S. retail sales exceeded expectations, growing by 0.4% in October compared to the prior month, and September’s figures were revised significantly higher with new data. New claims for unemployment benefits also dropped to a six-month low, signaling strength in the labor market.

The Russell 2000 Index, which tracks small-cap stocks, fell around 4% for the week, extending its underperformance relative to large-cap stocks. This decline erased much of the nearly 9% surge it saw the previous week.

As the quarterly earnings season wrapped up, major retail companies reported results. According to FactSet, analysts anticipated that S&P 500 companies would post a 5.4% increase in third-quarter earnings compared to the same period last year, up from the 4.2% growth forecast at the start of earnings season on September 30.