Wall Street Declines For The Fourth Fay In A Row As Recession Fears Linger

Monday was the fourth consecutive loss on Wall Street, with the Nasdaq leading declines as investors shied away from riskier bets out of concern that the Federal Reserve's tightening drive could force the U.S. economy into a recession.

Since Wednesday, when Fed Chair Jerome Powell adopted a hawkish stance and the central bank boosted interest rates, the three major U.S. stock indexes have been under pressure. Powell pledged additional rate increases despite statistics indicating a weaker economy.

The S&P 500, Dow Jones industrials, and Nasdaq have declined significantly in December and are on course for their largest yearly losses since the 2008 financial crisis.

According to Ally's chief market analyst, Brian Overby, while U.S. Treasury yields increased, investors fled equities in favor of safer bets as the risk of a recession in 2023 grew.

"Investors are wondering, 'Why would I want to incur such risks heading into 2023 with the Fed's attitude remaining aggressive when I can earn such a fantastic yield on the fixed income market?'"

According to Melissa Brown, Global Head of Applied Research at Qontigi in New York, the lack of major earnings announcements or economic data on Monday likely heightened investors' emphasis on economic anxieties and interest rates.

"We are on the razor's edge between teetering into a recession and having a gentle landing. Is the Federal Reserve working properly?" Brown added that movements may be exaggerated due to the fact that many investors are on vacation during the end-of-year holidays.

The Dow Jones Industrial Average sank 162.92 points, or 0.49 percent, to 32,757.54, the S&P 500 lost 34.7 points, or 0.90 percent, to 3,817.66, and the Nasdaq Composite slid 159.38 points, or 1.49 percent, to 10,543.

The S&P industry sectors with the largest declines were communications services, down 2.2%, consumer discretionary, down 1.7%, and technology, down 1.5%. Energy outperformed, closing up 0.13 percent as the only sector out of eleven to achieve a gain.

Apple Inc (NASDAQ:AAPL), Microsoft Corp (NASDAQ:MSFT), and Amazon.com Inc (NASDAQ:AMZN) constituted three of the market's most significant drags.

Tesla (NASDAQ:TSLA) Inc trading was turbulent, with the electric vehicle manufacturer finishing down 0.24 percent after sliding as much as 2.8% during the session. This occurred after a Twitter poll revealed that the majority of respondents want Tesla CEO Elon Musk to resign from his position as CEO of the social media site.

Meta Platforms shares closed 4.1% lower after the European Commission announced it could levy a fine of up to 10% of the software conglomerate's annual global revenue if evidence demonstrated a violation of EU antitrust regulations.

L3 Harris Technologies (NYSE:LHX) fell 3.6% after the U.S. defense contractor announced a $4.7 billion acquisition of hypersonic engine maker Aerojet Rocketdyne Holdings (NYSE:AJRD) Inc. Aerojet added 1.3%.

Shares of casino operators Melco Resorts & Entertainment (NASDAQ:MLCO), Wynn Resorts (NASDAQ:WYNN), and Las Vegas Sands (NYSE:LVS) Corp fell roughly 8%, 5.2%, and 2.3%, respectively, after Macau announced on Friday that six casino firms will invest approximately $15 billion as part of new 10-year contracts to operate in the world's largest gambling hub.

On the NYSE, declining issues outnumbered rising ones by a ratio of 2.80 to 1; on the Nasdaq, the ratio was 2.63 to 1.

The S&P 500 achieved 5 new 52-week highs and 20 new lows, while the Nasdaq recorded 66 new highs and 456 new lows.

On U.S. exchanges, 11.07 billion shares changed hands, compared to the 20-day average volume of 11.59 billion shares.