Apple drags down Wall Street
The fall in shares of Apple and Tesla on Tuesday dragged down the main Wall Street stock indexes, as investors worried about the path of interest rate hikes from the Federal Reserve awaiting the minutes of its meeting of December.
According to preliminary data, the S&P 500 lost 0.40% to 3,824.07, while the Nasdaq Composite was down 0.75% to 10,388.28. The Dow Jones Industrial Average fell 0.04% to 33,134.92 units.
Shares of electric vehicle maker Tesla hit a low since August 2020 and put pressure on the consumer discretionary sector, after missing Wall Street estimates for quarterly deliveries. In addition, one analyst lowered his recommendation on the stock due to production cuts in China due to COVID-19.
The major US stock indices had ended 2022 with their biggest annual losses since 2008: the S&P 500 plunged 19.4% in 2022, implying a market capitalization decline of about $8 trillion, while the Nasdaq fell 33.1%, dragged down by growth values.
“Although the timing has changed, many of the major issues for the market have not, specifically with the Federal Reserve tightening monetary policy as it remains concerned about inflation,” said Chris Zaccarelli, chief investment officer at the Independent Advisor Alliance.
“We are in a bear market. The negative is the default reaction to everything,” he added. “Until the Fed really changes its tune, it’s an uphill battle for the market.”
Investors will look closely on Wednesday at the minutes of the Federal Reserve’s December policy meeting, in which the central bank raised interest rates by 50 basis points after four consecutive 75 basis point hikes.
With information from Reuters.