Apple and Tesla Lead Wall Street’s Decline

Wall Street’s major indexes closed lower on the first trading day of 2023 with the biggest drag from Tesla and Apple, while investors worried about the Bureau’s rate hike roadmap Federal Reserve as they wait a few minutes from their December meeting.

Shares of electric vehicle maker Tesla Inc (TSLA.O) closed down 12% after hitting their lowest level since August 2020 and putting pressure on the consumer discretionary sector (.SPLRCD) after Wall Street estimated the number of missed fourth-quarter deliveries.

Apple Inc (AAPL.O) shares fell 3.7%, with the iPhone maker hitting its lowest level since June 2021, after a report from Nikkei Asia pointed to weaker demand. Additionally, one analyst downgraded their rating on the stock due to production cuts in China due to the COVID-19 hit.

The energy sector (.SPNY), which recorded a massive gain in 2022, closed down 3.6% on the first trading day of the year as oil prices fell on dismal business data from China. countries and concerns about the global economic outlook. .

The main US stock indexes in 2022 post their highest annual losses since 2008 following the Fed’s fastest rate hike since the 1980s to quell high inflation in decades .

“The year 2022 has been a bad year for the stock market. Some of the reasons for that haven’t gone away because we’ve changed the calendar,” said Michael James, managing director of equity trading at Wedbush Securities. in Los Angeles, said. “There is still growing anxiety, uncertainty about the Fed and inflation. Until there is clarity on that, it will be difficult to generate any upside in the stock market.”

Given the influence Apple and Tesla have on the market, James also cited their specific concerns over S&P weakness on Tuesday.

The Dow Jones Industrial Average (.DJI) fell 10.88 points, or 0.03%, to 33,136.37; The S&P 500 (.SPX) lost 15.36 points, or 0.4%, to 3,824.14; and Nasdaq Composite (.IXIC) fell 79.50 points, or 0.76%, to 10,386.99.

The S&P 500 is down 19.4% in 2022, marking a roughly $8 trillion drop in market capitalization, while the Nasdaq is down 33.1% as growth stocks drag.

Of the 11 major S&P 500 sectors, after energy, technology was the second biggest loser, losing 1%, with Apple accelerating its decline as it ended the day with a market valuation below $2 trillion. USD for the first time since March 2021.

Tesla’s biggest daily percentage drop since September 2020 helped make the discretionary consumption index (.SPLRCD) the S&P’s third-weakest sector on the day with a 0.6% drop.

The day’s biggest gainer was media services (.SPLRCL), with Facebook parent Meta Platforms Inc (META.O) leading the way with a 3.7% gain.

Investors on Wednesday will keep a close eye on the minutes of the Fed’s December policy meeting, when the central bank raised interest rates by 50 basis points after four consecutive 75 basis points and showed interest capacity can remain at a higher level for a longer period of time.

Other economic data to be released this week include the ISM manufacturing report also on Wednesday and the December jobs report on Friday.

Weakness in the labor market may give the Fed a reason to ease monetary tightening, but data so far suggests markets remain tight despite the rate hike.

Money market participants see a 68% chance the Fed will raise its key rate by 25 basis points to 4.50% to 4.75% in February, with rates peaking at 4.98 % in June.

Issues rose more than issues fell on the NYSE by a ratio of 1.42 to 1; on Nasdaq, a ratio of 1.20 to 1 favors the bulls.

The S&P 500 posted a new 52-week high and five new lows; Nasdaq Composite recorded 92 new highs and 58 new lows.

On US exchanges, 10.618 billion shares changed hands, marking an increase from last week’s lower volume due to the holiday season. It is compared with an average of 10,799 billion shares over the last 20 trading days.

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