Traders on the NYSE floor, Oct. 21, 2022.
Stocks faltered on Tuesday, giving up earlier gains, as worries like rising rates and high inflation that rocked the market last year continued to weigh on investors in the new year.
The S&P 500 was down 0.92% from the day’s high in December, when the manufacturing index fell at its fastest pace since May 2020. The Dow Jones Industrial Average lost 217 points, or 0.66%, and the Nasdaq Composite lost 1.29%.
stocks Tesla and apple Both sliding and impacting the broader market are driving the underlying theme from 2022, when the tech sector is hit hard as the Federal Reserve raises rates to fight inflation. Tesla fell more than 12% after disappointing fourth-quarter deliveries, and Apple fell more than 3% on reports it will cut production due to weak demand.
The theme could continue into 2023 as the central bank continues to raise interest rates in the coming months, fueling fears that the US economy could slip into recession.
“A recessionary environment in 2023 could further hamper the performance of tech stocks in the new year, as investors’ thirst for value-oriented companies and companies with higher profit margins, more consistent cash flow and strong dividend yields will increase,” said CEO Greg Bassuk. AXS Investments in New York.
The major averages closed 2022 with their worst annual losses since 2008, snapping a three-year winning streak. The Dow ended the year down about 8.8% and 10.3% off its 52-week high. The S&P 500 has lost 19.4% for the year and is down more than 20% from a record high. The tech-heavy Nasdaq lost 33.1% last year.
Of course, there may be brighter days ahead. History also shows The US stock market tends to rebound after down years. In fact, the S&P 500 gained an average of 15% the year after it lost more than 1%.
Investors receive a package of information in the first trading week of the year that will provide additional information on the state of the economy.
It’s a big day on Wednesday with the Job Openings and Labor Turnover Survey, known as JOLTS, due out in the morning and minutes from the Fed’s latest policy meeting in the afternoon.
They also await Friday’s December jobs report, the final employment report the Fed will have to review before its next meeting in February. 1. There are also several speeches by Fed presidents scheduled for Thursday and Friday.
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