The New York Stock Exchange closed its first session of 2023 in the red, continuing the gloomy trend of the end of the previous year, weighed down in particular on Tuesday by the decline in Tesla and Apple shares.
The Dow Jones index fell 0.03% to 33,136.37 points, the tech-heavy Nasdaq lost 0.76% to 10,386.98 points and the S&P 500 fell 0.40% to 3,824.14 points, according to the final results.
Wall Street had briefly started the session higher after a long New Year’s weekend, looking set to recover from the worst year since 2008 for the stock market.
But equities could not maintain this positive momentum, “since the restrictive policy” of the US central bank (Fed) “and fears of recession remained at the heart of investors’ concerns,” said Edward Moya, analyst at ‘Oanda.
Bargain hunting, motivated at the start of the session by low share prices, has failed and “it is too early to start betting on a change in the Fed’s attitude this year”, continued the analyst. “It will make the environment difficult for equities” at the start of the year, she added.
Bond rates, which had ended 2022 at 3.87% for 10-year US Treasuries, fell sharply to 3.76% as of 21:30 GMT.
The gloomy mood of traders focused on Tesla stock, which again fell sharply to a new low since August 2020.
Shares of the electric vehicle maker, which had already lost 65% last year, lost another 12.24% to close at $108.10.
The action was harshly punished as the Elon Musk-led group announced disappointing deliveries for the full year last year on Monday.
The brand delivered 1.31 million EVs in 2022, a record and a 40% year-on-year increase, but falls short of its own forecasts and Wall Street expectations.
“The fourth-quarter numbers missed the mark due to continued logistics issues, demand concerns and increased competition from other manufacturers,” Schwab analysts said.
In the last quarter alone, deliveries stood at 405,000 vehicles (+18%), while analysts expected 418,000.
A JPMorgan analyst further downgraded his earnings projections for the latest quarter and full year 2023, further depressing the stock.
Apple was also bad, beating the Nasdaq, while the apple company’s stock dropped 3.74% to 125.07 dollars.
Suddenly, the valuation of this tech mega-cap, which had exceeded $3 trillion in early 2022, has dropped below $2 trillion for the first time since last May. The stock meanwhile is at its lowest since June 2021.
Apple seems to be facing delays in the delivery of its iPhone 14 Pro made in China.
Investors are also concerned about rising interest rates, which could weigh on the producer’s cost of investment.
Most S&P sectors closed in the red, led by energy (-3.62%) which followed sharp declines in crude oil prices, on concerns about energy demand around the world as the spread of Covid-19 puts China’s economic reopening is in jeopardy.
Saved, the communication sector is on the rise, with in particular a leap of 3.66% from Meta, the parent company of Facebook.
On Wednesday, conglomerate General Electric will ratify the spin-off of its health care arm GE HealthCare and take it public.
Investors will also be eyeing the minutes of the latest Fed monetary meeting.