Equities are falling lower as price jitters undermine hopes of a year-end rally

US stocks extended their defeat on Monday after stocks posted consecutive weekly losses for the first time since late September.

The S&P 500 (^GSPC) fell 0.9%, while the Dow Jones Industrial Average (^DJI) fell about 160 points, or 0.5%. The tech-heavy Nasdaq Composite (^IXIC) fell 1.5%. All three major averages fell to six-week lows for the fourth day in a row.

Monday’s moves continued a sell-off from last week, which came after Federal Reserve officials pushed a half percentage point hike in their overnight policy rates. Fed Chair Jerome Powell also stressed that interest rate hikes will continue into the new year and that policy will remain restrictive for as long as necessary to contain still high inflation – even if it has economic consequences.

The S&P 500 lost 2.1% this week, the Dow 1.7% and the Nasdaq 2.7%.

“Data showing a cooling in inflation may have given the market a short-lived boost, but the fact that the Fed stood firm with Powell pointed to the point that interest rates could remain high for some time to come. some investors probably grounded,” Chris Larkin, managing director of trading at Morgan Stanley’s E*TRADE, said in a note.

In other parts of the market, US Treasury yields rose, while the US dollar index declined. Oil rose, with West Texas Intermediate (WTI) crude oil futures rising nearly 2% to trade above $75 a barrel.

Tesla’s (TSLA) stock closed just under after rising and falling as much as 3% earlier in the session following CEO Elon Musk’s Twitter poll asking whether he should step down as head of the social media platform he recently acquired . Oppenheimer downgraded the stock, calling sentiment “severely damaged.”

Last week, shares of Tesla fell 16% — the worst week since the start of the COVID-19 pandemic in March 2020 — on concerns about Musk’s management of Twitter and the sale of Tesla stock.

Megacaps were also under pressure, with Apple (AAPL), Microsoft (MSFT) and Alphabet (GOOG) each up more than 1.5%. Shares of Facebook parent company Meta Platforms (META) fell 4.1% after the European Union accused the company of violating antitrust laws by distorting competition in online classified advertising markets.

AMC Entertainment (AMC) dropped below $5, its lowest since March 2021.

The company announced Monday that it has raised more than $162 million from its AMC Preferred Equity units (APE) since the program’s inception a few months ago, with the proceeds to pay down debt and fund strategic acquisitions. .

Elsewhere, shares of Disney (DIS) fell 4.8% to their lowest level since March 2020 after “Avatar: The Way of Water” fell short of industry expectations of more than $170 million in opening weekend revenue.

Shares of Coinbase (COIN) hit a record low of $34.64 during the session to close up 3.9%.

The Federal Reserve’s coverage of continued, restrictive monetary policy has dampened hopes of a Santa Claus rally — a steady rise in the stock market that happens around the holiday season. With its second weekly drop on Friday, the S&P 500 is now down nearly 6% month-to-date.

“It was a one-two punch — it was about the Fed and then some weaker economic data — and that has created an image of a Fed that has been relentless about inflation and perhaps careless about the economy, without particularly realizing how much impact and how much damage it’s done so far,” Invesco Chief Global Market Strategist Kristina Hooper told Yahoo Finance Live. “The general concern is that we’re heading into a recession based on what the Fed has already done, and what’s more, the Fed is poised to do more.”

Traders work on the trading floor at the New York Stock Exchange (NYSE) in New York City, U.S. Dec. 14, 2022. REUTERS/Andrew Kelly

Traders work on the trading floor at the New York Stock Exchange (NYSE) in New York City, U.S. Dec. 14, 2022. REUTERS/Andrew Kelly

Before markets close for a long Christmas weekend, investors are in for a frantic economic and earnings setup that could provide further hints about the direction of Fed policy in the new year.

This week’s economic calendar will provide investors with the latest Personal Consumption Expenditure Price Index — or PCE — the Fed’s measure of inflation, as well as another reading on GDP, a suite of housing data and the Conference Board’s measure of consumer confidence.

Earnings from Nike (NKE), General Mills (GIS), FedEx (FDX), Micron Technology (MU) and Carnival Cruises (CCL) are also highlights this week.

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

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