Wall Street closed lower after choppy trading on rising recession fears

  • Apple drops after Morgan Stanley cut its December shipping target
  • Tesla falls into production loss fears

(Reuters) – Wall Street’s major indexes closed broadly lower on Wednesday, after a choppy session in which investors struggled to grasp a clear direction as they weighed how the Federal Reserve’s monetary tightening could feed into US companies.

S&P 500 benchmark (.SPX) It fell for the fifth consecutive session, while the Nasdaq fell (nineteenth) Finished down for the fourth straight time.

The Nasdaq was dragged down by a drop in Apple Inc (AAPL.O) On Morgan Stanley’s goal of lowering iPhone shipments and landing Tesla Inc (nineteenth) about production loss concerns.

The markets were also rocked by downbeat comments from senior executives at Goldman Sachs Group (GS.N)JPMorgan Chase & Co (JPM.N) and Bank of America Corp (BAC.N) On Tuesday, a moderate to more severe recession is likely.

Concerns have increased recently that the US central bank may commit to a longer rate hike cycle in the wake of strong jobs and services sector reports.

More economic data, including weekly jobless claims, producer price index, and the University of Michigan consumer sentiment survey this week, will be on your watch list for clues about what to expect from the Fed on December 14th.

“It appears that we are in this period of uncertainty where investors are trying to ascertain what matters most, policy makers are slowing down on rates, but data is not playing a role,” said Craig Erlam, senior market analyst at OANDA.

“The market is trying to balance headwinds and tailwinds and that is causing some confusion.”

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CBOE Volatility Index (.VIX)also known as the Wall Street Fear Barometer, rose to a two-week high before retreating slightly.

Money market participants see a 91% chance that the Fed will increase its key rate by 50 basis points in December to 4.25%-4.50%, with rates peaking in May 2023 at 4.93%.

According to preliminary data, the S&P 500 index (.SPX) It lost 6.63 points, or 0.17%, to close at 3934.63 points, while the Nasdaq Composite lost (nineteenth) It lost 54.77 points, or 0.50%, to 10,960.12 points. Dow Jones Industrial Average (.DJI) It fell 8.30 points, or 0.02%, to 33,588.04 points.

Concerns about a sharp rise in borrowing costs have boosted the dollar, but have dampened demand for riskier assets such as stocks this year. The S&P 500 is on its way to a three-year winning streak.

Few of the 11 major S&P sector indexes were higher, with the health care sector (.SPXHC) one of them. technology (.SPLRCT) and communication services (.SPLRCL) She was among the worst performers.

energy (.SPNY) It fell for the fifth consecutive session. The sector’s performance was affected by the decline in US crude prices again, and it settled at its lowest level in 2022, as concerns about the global growth outlook wiped out all gains since the Russian invasion of Ukraine, exacerbating the worst global energy supply crisis in decades.

Carvana Corporation (CVNA.N) It lost nearly half its share value after Wedbush downgraded the used-car retailer’s stock rating to “underperform” from “neutral” and lowered its price target to $1.

Meanwhile, United Airlines (UAL.O) I traded less. Unions representing the various workers on the airline said they would join forces in contract negotiations.

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Travel-related inventories are generally down. Delta Airlines (DAL.N) and American Airlines Group (AAL.O) It was lower, and so were cruise line operators Carnival Corp (CCL.N) and Norwegian Cruise Line Holdings (NCLH.N) and Airbnb Inc associated with the lodging (ABNB.O) Reservation of collectibles (BKNG.O).

(Reporting by Shubham Batra, Anika Biswas, Yohan M. Cherian and Shashawat Chauhan in Bengaluru and David French in New York; Editing by Vinay Dwivedi, Shonak Dasgupta and Lisa Shumaker

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