Wall Street declines as recession fears linger According to Reuters

© Reuters. FILE PHOTO: A trader works on the trading floor at the New York Stock Exchange (NYSE) in New York City, U.S., December 14, 2022. REUTERS/Andrew Kelly

By Sruthi Shankar and Johann M Cherian

(Reuters) – US stock indexes fell on Monday, led by shares of Tesla (NASDAQ:) and other large-cap companies, as investors worried that the policy tightening campaign Federal Reserve currency could push the US economy into recession.

Major US benchmarks suffered a sharp sell-off in December, sending them into their worst annual decline since the 2008 financial crisis, after economic data and sentiment mixed Fed’s hawks raise recession fears.

Market heavyweights such as Apple Inc (NASDAQ:), Microsoft Corporation (NASDAQ:) and Inc (NASDAQ:) fell more than 1% on Monday, as Treasury yields rose. [US/]

Tesla Inc fell 1.6 percent, reversing sharp pre-market gains after a Twitter poll showed a majority of users voted for Elon Musk to step down as chief executive of the social media platform. .

“There are lingering negatives from the Fed’s more hawkish comments, with concerns about interest rates ending this week,” said Michael James, senior vice president of institutional equities trading at Wedbush Securities. next year and how that will affect valuation.”

“As people adjust their expectations after the Fed meeting, higher interest rates generally mean more compressed multiples for growth stocks.”

The benchmark and tech-heavy Nasdaq lost more than 2% last week after Fed Chairman Jerome Powell signaled more policy tightening and the central bank predicts that interest rates will hit the 5% mark in 2023, a level unseen since 2007.

Furthermore, hawkish messages released by three Fed officials including New York Fed President John Williams last week underscored the US central bank’s determination to do what is necessary to reduce reduce price pressure.

However, money market participants are pricing in a 61% chance of a 25bps rate hike in February to 4.5%-4.75%, with a final rate of 4.84% in February. May 2023.

This week’s labor market and inflation data will weigh on investors’ mood, providing further clues to future rate hikes by the central bank.

At 12:27 p.m. ET, the index was down 76.26 points, or 0.23%, at 32,844.20, the S&P 500 was down 23.98 points, or 0.62%, at 3,828.38 and fell 133.19 points, or 1.24%, at 10,572.22.

Seven of the S&P’s 11 key sectors were lower, with consumer discretionary goods, media services and technology leading the losses.

Platform Meta fell 2.9% after the European Commission said it could fine the tech conglomerate up to 10% of its annual global revenue if there is evidence it is in violation of EU antitrust laws.

L3Harris Technologies (NYSE:) Inc lost 3.3% after the US defense contractor said it would buy supersonic engine maker Aerojet Rocketdyne Holdings (NYSE:) Inc for $4.7 billion. Aerojet increased by 1.6%.

Shares of casino operator Melco Resorts & Entertainment (NASDAQ:), Las Vegas Sand Beach (NYSE:) Corp and Wynn Resorts (NASDAQ:) fell between 1.5% and 10.5% after Macau said on Friday that six casino companies would invest about $15 billion as a part of the new 10-year contract they signed to operate in the world. largest gambling center.

Losers outnumbered gainers by 2.10 to 1 on the NYSE and 2.35 to 1 on Nasdaq.

The S&P index recorded five new 52-week highs and 15 new lows, while the Nasdaq recorded 42 new highs and 335 new lows.

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