Stocks drop on the first trading day of 2023

US stocks fell on Tuesday morning as the busy first trading week of 2023 got underway.

S&P 500 Index (^ The Salafist Group for Preaching and Combat(down 0.5% after opening higher, while the Dow Jones Industrial Average fell)^ DJI) decreased by 0.4%. Nasdaq Technology Heavy Composite (^ ix) also decreased by 0.7%.

The moves early on Tuesday followed broad declines on Friday in a fitting end for Wall Street The worst year since the global financial crisis in 2008. US stock and bond markets were closed on Monday in observance of the New Year.

The S&P 500 fell 19.4% in 2022, while the Nasdaq Composite wiped out a third of its value, dropping 33% and closing for its first drop in four quarters since the dot-com bubble of 2000. The Dow Jones fell by a relatively modest 9%, hold up better than peers in the index but still capped three consecutive years of gains for the major averages.

optimism around China recovery After researchers in Shanghai has reported the most COVID cases in major Chinese cities It may have peaked which helped boost sentiment early Tuesday morning.

Shares of Chinese companies traded on US exchanges were pushed forward, with Alibaba Group (Baba) and Baidu (Bedo) each rise by at least 5%.

Blog (mint) The stock is up 2% after the upgrade from Baird Analysts to Outperform, with a new price target of $78 per share, up from $62 previously.

Tesla (TSLA) remained in the spotlight to start the year after the electric car maker on Monday Reported record production and delivery of vehicles in the fourth quarter, but still lagged Wall Street estimates. Tesla shares fell nearly 10%.

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The company ended its worst year ever in 2022, losing 65%, or about $700 billion, of market value. In December, growing concerns about production delays in China and CEO Elon Musk’s management of Twitter sent the stock down 36%, its biggest monthly drop since Tesla went public in 2010.

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

Oil prices fell, with West Texas Intermediate (WTI) crude futures down 1.7% to trade at less than $79 a barrel. Meanwhile, the US dollar index rose on Tuesday morning.

The new year may not be a fresh start for investors, as strategists warn that many of the headwinds that plague markets in 2022 Will continue into the new yearInflation, continued monetary tightening by the Federal Reserve, and the risk of a sharp downside with further rising interest rates in the US economy.

“The story in 2022 was the Fed raising interest rates and strangling the stock and bond markets, and by pointing to a bunch of other markets in the process as well,” Obemas CEO Octavio Marenzi told Yahoo Finance Live on Friday. Final rate of 5% was “A thoughtless optimist.”

Stock trader 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 peak is only 75 basis points away If you look at where the inflation isMarenzi said. “I think there’s more pain coming in 2023 – I think basically we’re going to see a repeat of 2022 – same kind of pressure, same trend.”

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economic You will capture data in your first abbreviated trading week year, as the Labor Department prepares to release its first jobs report for 2023 on Friday morning. Economists expect a payroll gain of 200,000 jobs for the month of December, according to Bloomberg estimates. Investors will get three additional job market updates, with the latest Job Opportunities and Labor Turnover Survey (or JOLTS report), ADP’s own payroll data, and Challenger Job Cuts report, all due.

Investors will also turn to the Fed’s release of minutes from its December policy meeting, which investors will scrutinize for clues to the central bank’s next move.

Alexandra Semenova is a correspondent at Yahoo Finance. Follow her on Twitter @tweet

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