Stocks ended lower Monday as markets continued to struggle with investor fears of a recession and simultaneous persistent inflation weighing on shares.
The Dow Jones Industrial Average fell 162.92, or 0.5% to 32,757.54. The S&P 500 fell 34.70, or 0.9% to 3,817.66. Losers outpaced winners 389 to 109 in the S&P 500. Within the S&P 500, industrials stocks led, while consumer staples lagged. The Nasdaq Composite fell 159.38, or 1.5% to 10,546.03.
Updated at 1:56 pm EST
U.S. stocks moved lower Monday, while the dollar gained modestly against its global peers and Treasury bond yields ticked higher, as investors looked to claw back loses from the worst week in more than three months heading into the final nine trading days of the worst year for equity markets since 2008.
A combination of weaker-than-expected economic activity data, alongside a surprisingly hawkish rate decision from the Federal Reserve, pummeled U.S. stocks last week, with the S&P 500 falling some 2% to close at 3,852.36 points, extending its year-to-date decline to just over 19%.
Similar sentiment is likely to grip markets this week, with volumes expected to be light ahead of the traditional holiday slowdown and an absence of major economic data releases outside of the housing sector.
Bond markets, meanwhile, continue to express recession concerns, as well as doubts over the Fed's projection of a 5.1% Fed Funds rate in early spring. Benchmark 2-year note yields were marked modestly lower at 2.423% in early New York trading, while 10-year paper rose 6 basis points to 3.586%.
The U.S. dollar index, which tracks the greenback against a basket of its global peers, slipped 0.06% to 104.642, powered in part by a firmer Japanese yen and reports of a potential rate hike from the Bank of Japan sometime in early 2023.
Housing and mortgage data will likely be in focus this week as investors track the impact of the Fed's renewed hawkish rate signaling and the ongoing pullback in consumer and construction demand.
The National Association of Homebuilders will published their benchmark sentiment survey Monday, with Housings starts and building permits data from the Census Bureau following on Tuesday.
The Mortgage Bankers' Association will update on benchmark mortgage rates, new applications and financing demand Wednesday, followed later that day with existing home sales for the month of December. New home sales data is expected on Friday.
Three key earnings reports to flag over what is effectively the final trading week of the year include updates from Nike (NKE), FedEx (FDX) and General Mills (GIS) on Tuesday and Micron Technology (MU) after the closing bell on Wednesday.
Markets were also tracking developments overnight in China, where authorities recorded their first Covid fatalities in several weeks amid the slow re-opening of the world's second-largest economy following nearly three years of aggressive lockdowns.
Heath officials elsewhere remain worried that a rapid change in China's Covid rules could result in a wave of infections and a surge in deaths, particularly given its poor record on vaccinations.
China's edge towards reopening has added a bid to oil prices, however, which edged modestly in overnight trading, supported as well by reports that the U.S. government is looking to begin replenishing the Strategic Petroleum Reserve with a fixed price purchase of 3 million barrels.
WTI contracts for January delivery were marked $1.18 higher at $75.47 per barrel while Brent contracts for February, the global pricing benchmark, added $1.27 to trade at $80.76 per barrel.
Heading into the final hours of the trading day on Wall Street, the S&P 500 was marked 33 points lower while the Dow Jones Industrial Average fell 190 points. The tech-focused Nasdaq Composite was down 146 points.
Global stocks were mixed, with Japan's Nikkei 225 falling 1.05% to close at a six week low of 27,237.64 points amid the BoJ rate talk, while the region-wide MSCI ex-Japan index fell 0.06%.
In Europe the Stoxx 600 was marked 0.27% higher by the close of trading in Frankfurt trading following its worst week since September, while the FTSE 100 was up 0.4% in London.
