US stocks slid on Tuesday in an unfavorable start to the busy first trading week of 2023.
The S&P 500 Index (^GSPC) fell to a session low of about 1% at noon after opening higher, while the Dow Jones Industrial Average (^DJI) fell more than 200 points, or 0.7%. The tech-heavy Nasdaq Composite (^IXIC) decreased by 1.3%.
Apple (AAPL) stock fell 4.1% on Tuesday, yielding the company’s market capitalization is less than $2 trillion — a symbolic milestone for the tech stock crash that wiped out more than $3 trillion in value from large-cap US giants last year.
Tesla (TSLA) also continued to plunge at the start of the new year, falling as much as 13% — the biggest drop since September 2020 — after the electric carmaker on Monday vehicle production and delivery report figures for the fourth quarter missed Wall Street estimates.
Adding to selling pressure, JPMorgan analyst Ryan Brinkman cut profit estimates and price targets on stocks following those results.
The company ended its worst year on record in 2022, down 65%, or about $700 billion in market value. In December, growing concerns about manufacturing delays in China and CEO Elon Musk’s management of Twitter sent the stock down 36%, its biggest monthly drop since Tesla’s launch. them in 2010.
In other stock moves, Block (SQ) stock rose 2% after Baird analysts upgraded it to Outperform, with a new price target of $78 a share, up from $62 previously.
Meanwhile, the optimism around China’s recovery after researchers in Shanghai reports COVID cases in major Chinese cities may have peaked to help boost sentiment on Tuesday morning.
Shares of Chinese companies traded on US exchanges boosted, with Alibaba Group (TORTOISE) and Baidu (BIDU) each rose by at least 4% despite declines in the broader market.
Tuesday’s moves follow Friday’s broad-based decline in an end in line with Wall Street. worst year since 2008 global financial crisis. The US stock and bond markets are closed on Monday for the New Year holiday.
The S&P 500 is down 19.4% in 2022, while the Nasdaq Composite has lost a third of its value, falling 33% and ending its first four-quarter decline since the 2000 dot-com bubble. The Dow fell a relatively modest 9%, better hold than its index is on par with but still ahead of a three-year winning streak for the major averages.
A new year may not be a fresh start for investors, with strategists warning that multiple headwinds have hit the market in 2022. will exist in the new year: inflation, the Federal Reserve continues to tighten its currency and the risk of a hard landing as interest rates continue to rise floods the US economy.
“The story in 2022 is that the Fed is raising interest rates and strangling the stock and bond markets, and shows that a whole bunch of other markets are in the process as well,” said Opimas CEO Octavio Marenzi with Yahoo Finance Live on Friday, adding to market expectations. with the final rate of 5% being “disinterested optimism.”
“I don’t think the top rate is just 75 basis points away if you look at where inflation,” said Marenzi. “I think there’s going to be more pain coming in 2023 – I think we’ll basically see 2022 repeat – same kind of pressure, same direction.”
Economical data will increase in the first trading week is shortened of the year, with the Labor Department set to release its first employment report for 2023 on Friday morning. Economists expect December jobs to increase by 200,000, according to Bloomberg consensus estimates. Investors will receive three additional labor market updates, with the latest Employment Opportunity and Labor Revenue Survey (or JOLTS report), ADP private payroll data and Challenger Job Cuts reports are coming soon.
Investors will also watch the Fed release minutes of its December policy meeting, which investors will look at for clues about the central bank’s next move.
In other markets early Tuesday, US Treasury yields fell. In 2022, the benchmark 10-year yield rose from around 1.5% at the start of the year to 3.88% on Friday.
Oil prices fell, with West Texas Intermediate (WTI) crude futures falling 1.7 percent to below $79 a barrel. Meanwhile, the US dollar index rose on Tuesday morning.
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Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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