The shares fall on the first trading day in 2023
US stocks fell on Tuesday morning as a busy first trading week of 2023 began.
The S&P 500 (^GSPC) fell 0.5% after opening higher, while the Dow Jones Industrial Average (^DJI) fell 0.4%. The technology-heavy Nasdaq Composite (^IXIC) also fell 0.7%.
The moves early Tuesday come after broad-based declines on Friday in a fitting end to Wall Street’s worst year since the global financial crisis of 2008. U.S. stock and bond markets were closed Monday for New Year’s Day.
The S&P 500 fell 19.4% in 2022, while the Nasdaq Composite wiped out a third of its value, falling 33% and ending its first four-quarter decline since the dot-com bubble of 2000. The Dow fell a relatively modest 9%, outperforming its index peers, but still caps a three-year winning streak for the major averages.
Optimism about China̵[ads1]7;s recovery after researchers in Shanghai reported that COVID cases in major Chinese cities may have peaked helped boost sentiment early Tuesday morning.
Shares of Chinese companies traded on U.S. exchanges pushed ahead, with Alibaba Group ( BABA ) and Baidu ( BIDU ) each rising at least 5%.
Blocks ( SQ ) shares rose 2% after an upgrade from Baird analysts to Outperform, with a new price target of $78 per share, up from $62 previously.
Tesla ( TSLA ) remained in the spotlight to start the year after the electric car maker on Monday reported record fourth-quarter vehicle production and deliveries, but still missed Wall Street estimates. Shares in Tesla plunged almost 10 percent.
The company finished its worst year ever in 2022, losing 65% or about $700 billion in market value. In December, growing concerns about production delays in China and CEO Elon Musk’s leadership of Twitter sent the stock down 36%, the biggest monthly drop since Tesla went public in 2010.
In other markets early Tuesday, US Treasury yields retreated. In 2022, the yield on the benchmark 10-year bond 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% to trade just below $79 a barrel. Meanwhile, the US dollar index rose on Tuesday morning.
A new year may not be a fresh start for investors, with strategists warning 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. further interest 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 indication a number of other markets in the process as well,” Opimas CEO Octavio Marenzi told Yahoo Finance Live on Friday, adding that market expectations. for a terminal rate of 5% were “insanely optimistic”.
“I don’t think the top rate is only 75 basis points away if you look at where inflation is,” Marenzi said. “I think there’s more pain to come in 2023 – I think basically we’re going to see a repeat of 2022 – same kind of pressure, same direction.”
Economic data will pick up in the shortened first trading week of the year, with the Labor Department set to release its first jobs report for 2023 on Friday morning. Economists expect payrolls to increase by 200,000 jobs for December, according to consensus estimates from Bloomberg. Investors will get three more updates on the labor market, with the latest Job Openings and Labor Turnover Survey (or JOLTS report), ADP’s private payrolls data and the Challenger Job Cuts report all due.
Investors will also be watching the Fed’s release of minutes from its December policy meeting, which investors will look for clues about the central bank’s next move.
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Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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