Stocks fall on first day of 2023 trading, Apple and Tesla sink

US stocks fell on Tuesday in a downbeat start to a busy first trading week of 2023.

The S&P 500 (^GSPC) fell to a session low of around 1% at midday after opening higher, while the Dow Jones Industrial Average (^ DJI) fell more than 200 points, or 0.7%. The high-tech Nasdaq Composite (^IXIC) fell 1.3%.

Apple (AAPLShares of ) sank 4.1% on Tuesday, bringing the company market cap below $2 trillion – a symbolic milestone for the fall in tech stocks that wiped out more than $3 trillion of value from the US mega-cap giants last year.

tesla (TSLA) also continued to fall to start the new year, falling as much as 13%, its biggest drop since September 2020, after the electric carmaker on Monday production and delivery of informed vehicles Fourth quarter figures that missed Wall Street estimates.

Adding to the selling pressures, JPMorgan analyst Ryan Brinkman cut its earnings estimates and price target in action immediately after those results.

The company closed out its worst year on record in 2022, losing 65%, or around $700 billion, in market value. In December, mounting concerns about production delays in China and CEO Elon Musk’s Twitter management sent shares tumbling 36%, their biggest monthly drop since Tesla went public in 2010.

In other stock movements, Block (square) shares rose 2% following an update from Baird analysts to Outperform, with a new price target of $78 per share, up from $62 previously.

Meanwhile, optimism around the recovery of china after researchers in Shanghai reported COVID cases in major Chinese cities may have peaked helped drive sentiment on Tuesday morning.

Shares of Chinese companies listed on US exchanges rose, with Alibaba Group (slime) and Baidu (START) each up by at least 4% despite declines in the broader market.

Tuesday’s moves come after Friday’s widespread declines in a fitting end to Wall Street. worst year since the global financial crisis in 2008. US stock and bond markets were closed Monday in observance of New Year’s Day.

The S&P 500 fell 19.4% in 2022, while the Nasdaq Composite wiped out a third of its value, falling 33% and closing out its first four-quarter decline since the 2000 dot-com bubble. The Dow fell 9. % comparatively modest, holding up better than its index peers, but still capping a three-year winning streak for major averages.

A new year may not be a fresh start for investors, with strategists warning that many of the headwinds that plagued markets in 2022 will persist into the new year: inflation, continued monetary tightening by the Federal Reserve and the risk of a hard landing as further rate hikes permeate the US economy.

“The story in 2022 was that the Fed raised interest rates and choked the stock and bond markets, and by the cue of a bunch of other markets in the process as well,” Opimas chief executive Octavio Marenzi said on Friday. to Yahoo Finance Live, adding that market expectations for a 5% terminal rate were “irrationally optimistic”.

Stockbroker Peter Tuchman reacts on the floor of the New York Stock Exchange at the closing bell on December 30, 2022 in New York.  - Wall Street stocks marked a grim end to 2022, falling to close lower on its worst annual performance in years.  Rising inflation and sharp interest rate hikes to cool demand have battered markets and investor confidence this year, in addition to global shocks like Russia's invasion of Ukraine.  (Photo by TIMOTHY A. CLARY/AFP) (Photo by TIMOTHY A. CLARY/AFP via Getty Images)

Stockbroker Peter Tuchman reacts on the floor of the New York Stock Exchange at the closing bell on December 30, 2022 in New York. (Photo by TIMOTHY A. CLARY/AFP via Getty Images)

“I don’t think the interest rate cap is only 75 basis points away. if you look where the inflation isMarenzi said. “I think there will be more pain in 2023, I think we will basically see a repeat of 2022, the same type of pressures, the same direction.”

Economic data will recover in the first abbreviated trading week of the year, with the Labor Department set to release its first jobs report of 2023 on Friday morning. Economists expect a payroll increase of 200,000 jobs for December, according to Bloomberg Consensus Estimates. Investors will get three additional updates on the labor market, with the latest Job Vacancy and Job Turnover Survey (or JOLTS report), ADP Private Payrolls data and the Challenger Job Cuts report all soon to be released.

Investors will also be watching for the release of the minutes from the Fed’s December policy meeting, which investors will peruse for clues about the central bank’s next move.

In other markets early Tuesday, US Treasury yields pulled back. In 2022, the benchmark 10-year note yield rose from around 1.5% at the start of the year to settle at 3.88% on Friday.

Oil prices plunged, with West Texas Intermediate (WTI) crude futures slipping 1.7% to trade just below $79 a barrel. Meanwhile, the US dollar index gained on Tuesday morning.

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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