Stocks dropped on Monday as investors worried there wasn’t enough time for a year-end rally, and recession fears increased.
The Dow Jones Industrial Average lost two hundred fifty-four points or 0.77%. The shares of Amazon fell 3%, which contributed to the S&P 500’s 1.17 percent decline and the Nasdaq Composite’s 1.71% decline.
The moves came after stocks had another down week following the Federal Reserve’s announcement of a 50 basis point increase in short-term rates and a hint at higher rates for longer. As the group increased its forecast for future hikes above previous expectations, saying that it now expects to increase rates to 5.1%, worries that the central bank will send the U.S. economy into a recession grew.
The hawkish stances of other central banks increase investor concerns about a global recession. Last week, the European Central Bank raised interest rates and stated that it anticipates further significant increases. Additionally, the Bank of Japan may reevaluate its 2% inflation target and may soon begin raising rates.
Markets are Falling
After two straight weeks of negative performance, stocks should close out a miserable monthly performance in December. The S&P 500 is currently down close to 4.5% over the same period, and the Dow is expected to end the month more than 3% lower. On schedule, the Nasdaq Composite will fall 5.4% this month.
Additionally, a few earnings reports due later this week will be on investors’ minds. On Tuesday, following the close of the market, FedEx and Nike will present their financial results. The importance of earnings results will increase as recession fears grow.
According to Mark Mahaney of Evercore ISI, who lowered his projections and price target for Amazon, the investment firm’s recent 2023 outlook report indicates that online retail and cloud computing will continue to experience weakness.
Disney — Following the underperformance of “Avatar: The Way of the Water” at the box office, Disney’s stock dropped 3.6%. The eagerly anticipated film made $134 million, less than the analysts’ $175 million prediction and the $135 to $150 million range Disney had predicted.