U.S. stock indexes took a leg lower midday Friday, capping a week marked by unsteady progress toward another coronavirus relief package by Congress and thus-far unsuccessful negotiations on Britain’s trade relationship with the European Union. Hand-wringing about overly bullish sentiment and lofty valuations, despite progress on a coronavirus vaccine rollout, has also unsettled investors after stock indexes hit new highs earlier in the week. How are stock benchmarks performing? The Dow Jones Industrial Average DJIA, +0.14% was trading 113 points, or 0.4%, lower at 29,886; the S&P 500 index SPX, -0.28% retreated 31 points to reach 3,637, a drop of 0.8%; and the Nasdaq Composite Index COMP, -0.47% lost 150 points, or 1.2%, to trade near12,256. On Thursday, markets ended mixed with the Nasdaq Composite finishing higher. For the week, the Dow is on track for a weekly decline of 0.8%, the S&P 500 index is headed for a 1.3% fall, while Nasdaq Composite is aiming for a 1% skid. What’s driving the market? Wall Street is contending with a series of potentially disappointing outcomes that are disrupting the bullish mood on Wall Street. A bipartisan $908 billion pandemic relief package in Washington remained limbo, even as weekly economic data on Thursday showed a sharp rise in jobless benefit claims, likely due to an uncontrolled second wave of the COVID-19 pandemic in the U.S. In the fiscal relief talks, the Senate on Friday voted to set up a final approval for an annual defense bill, with the move easing concerns that a partial federal government shutdown could start at midnight when funding for operations expires. But Senate Republicans are still pushing for a narrower coronavirus relief bill, with differences centering on state and local government aid, and liability protection for businesses. “The policy issues in Washington are really what’s driving the market,” said Donald Calcagni, chief investment officer with Mercer Advisors. “There’s still a lingering sense of anxiety that the election is not settled yet. The lawsuit led by Texas, I think creates some anxiety. Market momentum looks like it’s dissipated and there’s more downside risk. We need some finality to this. The challenge is that the president probably won’t concede. I think we’re in a weird place between now and the inauguration.” “There are short-term headwinds, including the shutdowns, case counts skyrocketing, and 3,000 Americans dying every day,” Calcagni added. “It will be hard for Congress to agree to anything before the Georgia run-off. I’m not bullish between now and early January. The market is ripe for correction, and I see possibly 7-10% downside if we don’t get more policy leadership around these issues.” Meanwhile, the U.S. Food and Drug Administration said that it plans to complete and issue an emergency use authorization to BioNTech BNTX, -1.31% and Pfizer Inc.’s PFE, -1.46% experimental COVID-19 vaccine, after an advisory panel recommended its approval on Thursday. Still, cases and deaths from the deadly pathogen have been on the rise, with the U.S. averaging 211,127 cases a day, in the past week. There was a record of 107,258 COVID-19 patients in U.S. hospitals on Thursday, according to the COVID Tracking Project, topping the record of 106,705 set a day earlier. See: U.S. suffers worst week for cases, deaths and hospitalizations since start of the pandemic Other countries have seen some vaccine setbacks though. Sanofi SA SNY, -3.84% said Friday that the vaccine program it is developing with British pharmaceutical giant GlaxoSmithKline PLC GSK, -1.21% has experienced a delay, and the Associated Press reported that Australia was abandoning a plan for a COVID-19 vaccine from biopharmaceutical company CSL CSL, -3.24%, after false positive results to HIV tests. In U.S. economic reports, the producer-price index climbed 0.1% last month, the government said Friday, matching the MarketWatch forecast. However, the rise in November reflected the smallest increase in seven months, underscoring the lack of inflationary pressure in an economy still struggling to emerge from the ravages of the coronavirus pandemic. However, some market participants said that other measures of inflation, including the Commodity Research Bureau Index, or CRB, are pointing to higher prices. “Bottom line, while the November PPI numbers look benign in the aggregate, the CRB commodity index was up 11% in the month alone so expect that to filter thru in the months to come and as seen in the pipeline stage of inflation,” wrote Peter Boockvar, chief investment officer at Bleakley Advisory Group. Meanwhile, a reading of consumer sentiment perked up in early December, as Democrats cheered the outcome of the November election. On top of the issues facing the U.S., U.K. Prime Minister Boris Johnson said the country needs to brace for the likelihood that a post-Brexit trade deal with the European Union won’t happen. European Commission President Ursula von der Leyen cautioned Friday that “positions remain apart on fundamental issues.” “This might just be talk, as a way of trying to put pressure on the UK but nonetheless, traders have reacted by dropping stocks,” wrote David Madden, market analyst at CMC Markets UK, in a research note. A deal must be struck before the end of 2020 otherwise the U.K.’s current commercial and trading ties with the EU expire on Jan 1 without an agreement in place, an outcome that could roil global markets anew. Which stocks are in focus? Pfizer Inc. said Friday’s its board has raised its quarterly cash dividend to 39 cents a share from 38 cents in the year-earlier period. The new dividend will be payable March 5 to shareholders of record as of Jan. 29. Shares were down 0.8% even amid the FDA news. Airbnb Inc. shares ABNB, +1.22% were still in focus after the home rental company surged in its initial public offering. Shares lost 0.6% by midday Friday. Tesla Inc. TSLA, -2.52% shares were 4.2% lower Friday after a downgrade, and one week before the company is added to the S&P 500 index. Shares of Walt Disney Co. DIS, +15.60% were up 13%, and heading for another record, after the entertainment company rolled out a streaming strategy. How are other assets faring? In Europe, the Stoxx Europe 600 index SXXP, -0.77% and the U.K.’s FTSE 100 UKX, -0.80% were both off 0.8%. The U.S. dollar index DXY, +0.17%, a gauge of the currency against a half-dozen rivals, was up 0.2% on Friday. In commodities, U.S. oil was lower after a strong week, with West Texas Intermediate crude oil trading on the New York Mercantile Exchange CL.1, -0.66% off 0.4% at $46.61 a barrel. Gold prices were rising as investors edged away from risk assets. Gold for February delivery GCG21, +0.34% gained 0.5% to $1,846.50 an ounce on Comex. The 10-year Treasury note TMUBMUSD10Y, 0.890% was yielding 0.88%, set for a weekly slide as bond prices rise and yields fall. In Asian trade, Japan’s Nikkei 225 NIK, -0.39% closed 0.4% lower on the day, while South Korea’s Kospi index 180721, +0.86% closed up 0.9%. Hong Kong’s Hang Seng index closed 0.4% higher on Friday, while China’s Shanghai Composite Index SHCOMP, -0.77% finished the day off 0.8% and the CSI 300 000300, -1.03% closed down over 1%.