STORY: Wall Street's main indexes closed lower on the first trading day of 2023 as investors worried about what the Federal Reserve's rate hiking path might look like this year and a potential recession.
The Dow ended about flat. The S&P 500 finished four tenths of a percent lower, while the Nasdaq ended down about three quarters of a percent.
Investors are awaiting minutes from the Fed's December meeting due on Wednesday for clues about how aggressive the central bank might be with monetary policy tightening this year and whether it might trigger a recession.
Dan Wantrobski is associate director of research at Janney Montgomery Scott.
"What's driving the down move in the stock markets today is reassessment on how severe a recession can be in the U.S., based on what we've seen out of Fed policy thus far. I think traders are starting to reevaluate, you know, how severe the type of recession that the Fed is trying to engineer here. And a lot is going to depend on labor data that comes out, wage gains, employment data, as well as other things like ISM production numbers, PPI and of course, CPI. So I think until you get more clarity around that, we could continue to see higher volatility in the markets and more kind of this rangebound trading that they're setting us up with today."
Shares of Tesla hit their lowest level since August 2020, falling more than 12% on Tuesday, extending a steep decline in 2022 after Elon Musk's electric vehicle maker missed Wall Street estimates for quarterly deliveries.
Energy stocks, which saw stellar gains in 2022, started the year in the red as oil prices fell on bleak business activity data from China.
And shares of Apple slumped, closing below the $2 trillion valuation mark for the first time since March 2021, after a report from Nikkei Asia pointed to weaker demand.