There are many declines that are not necessarily significant
New York (MidLand) – Some of Wall Street’s major indexes fell at the end of trading on Monday (Tuesday morning WIB), triggered by investors’ cautious attitude ahead of the release of this week’s jobs data, which could change expectations of a Federal Reserve cut. interest rates early next year.
The Dow Jones Industrial Average corrected 0.11% to 36,204.44, the S&P 500 index fell 0.54% to 4,569.78 and the Nasdaq Composite index weakened 0.84% to 14,185.49.
The S&P 500 index weakened, with giants such as Microsoft, Apple, Nvidia and Amazon losing more than 1%, pressured by higher US government bond yields that made stock returns less attractive.
The S&P 500 Index posted its highest close of the year on Friday (1/12) after Fed Chair Jerome Powell acknowledged the need for the central bank to proceed with caution amid signs of economic weakness. The comments strengthened expectations that the Fed was done raising interest rates.
Small-cap stocks rose Monday (12/4), with the Russell 2000 gaining about 1% and extending its gain to nearly 7% this year.
“There are a lot of recessions that aren’t necessarily significant,” said Tom Martin, senior portfolio manager at GLOBALT Investments in Atlanta.
According to Martin, the December Fed meeting is very important and what makes it crucial is that the market suddenly decided that the Fed would make cuts early next year.
Shares of ride-hailing service provider Uber Technologies rose 2.2% after announcing Friday (1/1) that it would join the S&P 500 index effective Dec. 18.
Alaska Air Group shares fell 14% after the airline said Sunday (12/3) that it would acquire partner Hawaiian Holdings for $1.9 billion, including debt. Hawaii stocks nearly tripled, helping lift the Russell index.
The main macroeconomic focus this week is the November jobs report, due Friday (8/12), which could help investors gauge the likely direction of Fed interest rates, as well as the potential for a “soft landing” ” in which the Fed manages to control inflation while avoiding a recession.
Traders widely expect the central bank to keep interest rates unchanged at its meeting next week. Interest rate futures indicate a 58% chance that the Fed will begin lowering interest rates in March 2024, according to CME Group’s FedWatch tool.
However, some analysts warned that the market was too quick to price in lower interest rates.
Adding to Monday’s decline (12/4) were new concerns about the spread of war in Israel and Gaza after attacks on three commercial ships south of the Red Sea.
Shares of cryptocurrency companies such as Coinbase Global, Riot Platforms and Marathon Digital rose between 5% and 9% after bitcoin surpassed US$40,000 for the first time this year.
Trading volume on U.S. exchanges was 12.7 billion shares compared to an average of 10.6 billion shares for the full session over the past 20 trading days.
The number of stocks that rose exceeded the number of stocks that fell by a ratio of 1.0:1.
The S&P 500 recorded 38 new 52-week highs and no new lows, while the Nasdaq recorded 125 new highs and 63 new lows.
So far in 2023 the S&P 500 has rallied 19%, while the Nasdaq has rallied 24%.
Sommer: Reuters
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Read also: Wall Street rises amid optimism that the Fed is done raising interest rates
Translator: Citro Atmoko
Editor: Ahmad Wijaya
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