- US stocks fell on Monday, marking a fourth consecutive loss for Wall Street's major indexes.
- Investors are focusing on a hard-landing scenario for the economy as the Fed pursues more rate hikes.
Stocks finished in the red on Monday, extending a string of losses with more interest rate hikes and recession worries in sight among investors as the end of the 2022 trading year approached.
All three of Wall Street's major indexes ended with a fourth consecutive decline and have lost ground over the past two weeks, including last week's fall of 2.1% on the S&P 500. Monday's session saw all 11 of the S&P 500's sector close lower, led by the communications services and information technology groups.
Signs of easing inflation led the Federal Reserve last week to reduce the size of its latest rate increase to 50 basis points, but the central bank still has more rate hikes in the pipeline. The European Central Bank last week also reduced its rate hike size to 50 basis points but struck a hawkish tone for its outlook on rates.
"The prior observation that bad economic news is good news for equities, allowing the Fed to take their foot off the financial conditions pedal, is shifting. Policy errors are being reflected more in a greater focus on economic growth," Huw Roberts, head of analytics at Quant Insight, said in a note.
Here's where US indexes stood at the 4:00 p.m. closing bell on Monday:
- S&P 500: 3,817.63, down 0.90%
- Dow Jones Industrial Average: 32,757.40, down 0.50% (163.06 points)
- Nasdaq Composite: 10,546.03, down 1.49%
Risky assets are "between a rock and a hard place given the resolve for both the Fed and ECB last week — weaker economic data raises the specter of recession, stronger data raises the specter of rates remaining higher for longer. This likely keeps equities in a fat and flat range with bounces being sold until a clearer regime emerges," Roberts wrote.
Among individual stocks, Tesla shares turned lower but had risen earlier in the session after voters in a poll put up by CEO Elon Musk said he should quit running Twitter. Musk said he would "abide by the results." Tesla investors and analysts have expressed concern that Musk's focus on Twitter is hurting Tesla.
Meta fell after the EU filed an antitrust complaint that could put the Facebook parent on the hook for a $11.8 billion penalty.
Here's what else is happening today:
- The worst earnings recession since 2008 could hit stocks next year, said Morgan Stanley chief US equity strategist Mike Wilson.
- Global IPO launches sank by 45% during a volatile 2022 for markets after a record-breaking year of offerings, according to EY.
- Lumber prices hit a new 2022 low after homebuilder sentiment dropped for the 12th month in a row.
- The US made $4 billion selling oil this year on President Biden's unprecedented releases from the Strategic Petroleum Reserve.
- "Dr. Doom" economist Nouriel Roubini said the world is on a "slow-motion train wreck" and an oncoming recession will be severe.
- A next-generation nuclear reactor project backed by Bill Gates and the US Department of Energy has hit a wall because its only source for the uranium it needs is Russia.
- In commodities, bonds, and crypto:
- West Texas Intermediate crude gained 1.6% to 75.45 per barrel. Brent crude, the international benchmark, picked up 0.6% to $80.10.
- Gold fell 0.2% to $1,796.15 per ounce.
- The 10-year Treasury yield jumped 13 basis points to 3.58%.
- Bitcoin fell 1.1% to $16,573.12.