Stocks gave up early gains on Tuesday, falling lower as lingering inflation and possible recession concerns continued to weigh on market participants. The Dow Jones Industrial Average slipped near a negative flatline, while the S&P 500 and Nasdaq Composite lost 0.4% and 0.8%, respectively, to start the year lower.
Here's how the market settled to start the week:
S&P 500 Index
Dow Jones Industrial Average
Nasdaq Composite Index
Weighing on the broader market, Tesla
Tesla dropped over 12%, falling to its lowest level since August 2020, as its record fourth-quarter production and deliveries failed to meet Wall Street estimates. Apple declined about 4% on reports that the tech giant plans to cut production in response to waning demand, with its market cap falling under $2 trillion for the first time since May.
Tesla was also impacted by a note from JPMorgan
In economic news, the U.S. purchasing managers index for manufacturing fell at the fastest rate since May 2020 in December, according to fresh data from S&P Global on Tuesday. The index stood at 46.2 in December, from from 47.7 in November.
Tuesday's moves followed a down year for Wall Street. The S&P 500 tumbled 19.4% in 2022, while the Nasdaq dropped 33%, losing one-third of its value. The Dow fared a bit better than other major averages, declining 8.8% for the year and 10.3% off its 52-week high, however it still snapped a three-year winning streak.
Amid the market's negative sentiment, Goldman Sachs
"Our economists continue to believe that the U.S. will avoid recession as the Fed successfully engineers a soft landing of the economy," Goldman analysts wrote Tuesday.
"This out-of-consensus forecast partly reflect our view that a period of below-potential growth is enough to gradually rebalance the labor market and dampen wage and price pressures," the note said. "But it also reflects our analysis that indicates that the drag from fiscal and monetary policy tightening will diminish sharply next year, in contrast to the consensus view that the lagged effects of interest rate hikes will cause a recession in 2023."
Looking ahead, market participants will react to the Job Openings and Labor Turnover Survey due out Wednesday morning and the minutes from the Fed's latest policy meeting slated to release in the afternoon. December's jobs report is also on the docket for Friday, which will be the final employment report the Fed will consider before its next meeting on February 1.