Growing Recession Fears Drag Equities Lower

Last Updated: Tuesday, December 6, 2022 4:32 PM | MT Newswires

US benchmark indices closed lower on Tuesday amid increasing concerns that the economy will fall into a potential recession in 2023.

The Nasdaq Composite lost 2% to 11,014.9, while the S&P 500 fell 1.4% to 3,941.3. The Dow Jones Industrial Average slid 1% to 33,596.3. Almost all sectors posted losses, led by energy, communication services, and technology. Utilities was the sole gainer.

Although markets are largely projecting that the Federal Reserve will slow the pace of its interest rate hikes at its meeting next week, analysts fear the move won't be enough to stop the world's largest economy from entering into a recession next year.

The US could see a downturn sometime in 2023 amid continued macro uncertainty and the Fed's aggressive stance against high inflation, though the economy is "not on the cusp" of a recession just yet, Oxford Economics said in a note e-mailed Monday. Citing a recent survey by the Federal Reserve Bank of Philadelphia, the firm said an unprecedented number of respondents forecast a recession over the next 12 months.

The US 10-year yield fell 8 basis points to 3.52%, and the two-year rate dropped 3.8 basis points to 4.36%.

In economic news, the US international trade deficit increased at a slower pace than analysts were expecting in October as exports declined for the second month in a row while imports rose at a more moderated pace. The goods and services deficit rose to $78.2 billion in October from a revised $74.1 billion in September, according to the US Bureau of Economic Analysis. Analysts surveyed by Econoday were expecting the deficit to widen to $80 billion.

Redbook reported that US same-store retail sales were up 5.7% year-over-year in the week ended Dec. 3, slower than a 10.4% gain in the prior week as consumers paused before pre-holiday sales resume.

West Texas Intermediate futures dropped 3.3% to $74.41 per barrel.

Saudi Arabia lowered selling prices for oil shipments to Asia, Europe and the US, which could make it easier for Europe to find a substitute for Russian oil supplies, Commerzbank said in a note.

In company news, Vivint Smart Home (VVNT) shares surged 32% on a deal to be acquired by NRG Energy (NRG) for $2.8 billion in cash. The NRG stock slumped 15%, the worst performer on the S&P 500.

Textron (TXT) was the top gainer on the index, up 5.3%, after the company said its Bell Textron unit won the development contract for the US Army's Future Long-Range Assault Aircraft program.

Gold moved up 0.1% to $1,783.7 per troy ounce, while silver fell 0.2% to $22.37 per ounce.

Share this article:

Related Companies

You May Also Like

Related Articles

Should Waste Management Stock Quest Resource Holding Corp (QRHC) Be in Your Portfolio Tuesday?

Perma-Fix Environmental Services, Inc. (PESI) Stock Gains 6.67% This Week: Is It a Good Pick?

Charah Solutions Inc (CHRA) Stock: What Does the Chart Say Tuesday?

Does Distribution Solutions Group Inc (DSGR) Have What it Takes to be in Your Portfolio Tuesday?

Is Knight-Swift Transportation Holdings Inc (KNX) Stock Trading Below Fair Value?

Should You Buy Sidus Space Inc (SIDU) Stock After it Is Down 62.26% in a Week?

Related Companies