
Stocks Stumble in the New Year, Weighed Down by Apple and Tesla
By Liz Moyer
U.S. stocks began the new year on a sluggish note, as major tech companies faced declines. Investors are awaiting the release of this week’s minutes from the Federal Reserve’s last meeting.
As of 14:13 ET (19:13 GMT), the Dow Jones Industrial Average decreased by 199 points, or 0.6%. The S&P 500 and the Nasdaq composite dropped by 0.8% and 1.1%, respectively.
Apple’s shares fell more than 4%, putting it at risk of closing below a $2 trillion market valuation for the first time since 2021. Tesla’s stock also suffered, dropping over 13% on Tuesday after a massive 65% decline in 2022. This decline followed reports of lower-than-expected deliveries for both the quarter and the year.
The stock market concluded 2022 with its worst performance since 2008, primarily due to rising interest rates that put pressure on previously high-performing growth and technology stocks. The Federal Reserve has been aggressively increasing interest rates in an effort to combat inflation, marking the quickest pace of hikes in decades. In December, the central bank suggested that it would continue raising rates until it was confident in its ability to control price increases.
Last year’s performance saw the S&P 500 fall by more than 19%, while the tech-heavy Nasdaq experienced a 33% decline.
Investors are looking to move past the challenges of the previous year, hoping that upcoming economic data will provide some optimism. A jobs report for December is expected on Friday, along with additional data to accompany the Fed minutes. Reports on oil inventory and job openings will also be of interest.
Market expectations indicate that the Fed will raise its policy rate by a quarter of a percentage point during its next meeting in February. This would represent a slower pace of increases compared to previous moves, but still maintain an upward trajectory.
Casino stocks are on the rise as China prepares to reopen its Macau gambling hub after COVID-related shutdowns. Wynn Resorts saw a 2% increase in its shares, while Las Vegas Sands Corp rose by 1.7%.
In the commodity markets, oil prices declined, with Brent crude down 3.9% to $77.12 per barrel and U.S. crude down 4.2% to $82.33 per barrel. Gold was up 1%, trading at $1,844.