US stocks closed lower on Tuesday as selling pressures from last year spilled over into a busy first week of 2023 trading.
The S&P 500 (^GSPC) fell 0.4%, while the tech-heavy Nasdaq Composite (^IXIC) index fell 0.8%. The Dow Jones Industrial Average (^DJI) capped the session just below breakeven.
Shares of Apple (AAPL) sank 3.7% on Tuesday to the lowest level since June 2021, taking the company’s market capitalization below $2 trillion, a symbolic milestone for the decline. of tech stocks that wiped out more than $3 trillion of value from US mega-cap giants last year. .
Tesla (TSLA) also continued to slide to start the new year, falling 12.2%, its biggest one-day drop in more than two years, after the electric carmaker reported on Monday that production and delivery figures of vehicles for the fourth quarter did not match those of Wall Street. Dear.
Adding to the selling pressures, JPMorgan analyst Ryan Brinkman cut his earnings estimates and target price for the shares immediately after those results.
The company closed out its worst year on record in 2022, losing 65%, or around $700 billion, in market value. In December, mounting concerns about production delays in China and CEO Elon Musk’s Twitter management sent shares tumbling 36%, their biggest monthly drop since Tesla went public in 2010.
In other stock moves, shares of Block (SQ) rose 2.9% after an upgrade by analysts from Baird to Outperform, with a new price target of $78 per share, up from $62 previously.
Meanwhile, optimism about China’s recovery after researchers in Shanghai reported that COVID cases in major Chinese cities may have peaked helped boost confidence among US-listed Chinese companies. . Alibaba Group (BABA) and Baidu (BIDU) each rose more than 4% despite falls in the broader market.
Tuesday’s moves came after widespread falls on Friday in a fitting end to Wall Street’s worst year since the global financial crisis in 2008. US stock and bond markets closed on Monday in observance of the day of New Year.
The S&P 500 fell 19.4% in 2022, while the Nasdaq Composite wiped out a third of its value, falling 33% and closing out its first four-quarter decline since the 2000 dot-com bubble. The Dow fell 9. % comparably modest, holding up better than its index peers but still capping a three-year winning streak for major averages.
A new year may not be a new beginning for investors, as strategists warn that many of the headwinds that plagued markets in 2022 will persist into the new year: inflation, continued monetary tightening by the Federal Reserve, and the Risk of a hard landing as further rate hikes permeate the US economy.
“The story in 2022 was that the Fed raised interest rates and choked the stock and bond markets, and by the cue of a bunch of other markets in the process as well,” Opimas chief executive Octavio Marenzi said Friday. to Yahoo Finance Live, adding that market expectations for a 5% terminal rate were “mechanically optimistic.”
“I don’t think the interest rate cap is only 75 basis points away if you look at where the inflation is,” Marenzi said. “I think there will be more pain to come in 2023, I think we’ll basically see a repeat of 2022, same kind of pressures, same direction.”
Economic data will pick up in the shortened first business week of the year, with the Labor Department set to release its first jobs report of 2023 on Friday morning. Economists expect a payroll increase of 200,000 jobs for December, according to Bloomberg Consensus Estimates. Investors will get three additional updates on the labor market, with the latest Job Vacancy and Job Turnover Survey (or JOLTS report), ADP Private Payrolls data and the Challenger Job Cuts report all soon to be released.
Wall Street will also be tuning in for the release of the Fed’s December policy meeting minutes on Wednesday, which investors will peruse for clues about the central bank’s next move.
Elsewhere on Tuesday, US Treasury yields pulled back. In 2022, the benchmark 10-year note yield rose from around 1.5% at the start of the year to settle at 3.88% on Friday.
Oil prices fell, with West Texas Intermediate (WTI) crude futures down 3.8% to trade just above $77 a barrel. Meanwhile, the US dollar index gained on Tuesday.
Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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