Stock market news live updates: Stocks snap four-day losing streak, Tesla sell-off intensifies
U.S. stocks capped a volatile session Tuesday with modest gains as investors stopped losses from stretching into a fifth day.
The S&P 500 (^GSPC) inched up 0.1%, while the Dow Jones Industrial Average (^DJI) added about 90 points, or 0.3%. The Nasdaq Composite (^IXIC) was just above flat. The moves came after four straight days of losses dragged all three major averages to their lowest closes in six weeks on Monday.
A hawkish move by the Bank of Japan to adjust the cap on its 10-year government bond yield rattled markets in early trading, with investors worried aggressive monetary tightening by central banks around the world may cause a global recession. Last week, the U.S. Federal Reserve, European Central Bank, and others raised interest rates.
In bond markets, U.S. Treasury yields extended an ascent, with the benchmark 10-year note topping 3.69%. Elsewhere, the U.S. dollar index slipped against a spike in the Japanese yen that followed the Bank of Japan's rate decision. Oil rose, with West Texas Intermediate (WTI) crude futures up 1% to trade above $76 per barrel.
Shares of Tesla (TSLA) tanked 8% to its lowest level since November 2020 as investor concerns escalated around CEO Elon Musk's leadership after reports he is looking for his replacement as head of Twitter.
The decline extends a period of heavy losses for the electric vehicle giant. Last week, shares of Tesla plunged 16% — marking its worst week since the onset of the COVID-19 pandemic in March 2020, with investors worried Musk's management of Twitter is diverting his attention away from Tesla.
Wall Street analysts have increasingly become more cautious on the company heading into 2023, adding to a brutal month and year for Tesla.
EvercoreISI analyst Chris McNally slashed his price target on Tesla's stock to $200 from $300 on Tuesday, joining bearish takes from Goldman Sachs, Wedbush, and Oppenheimer.
Tesla's sell-off also weighed heavily on Cathie Wood's ARK Invest — a bellwether for speculative technology stocks and large holder of the electric carmaker. Ark Innovation (ARKK), the firm’s beleaguered flagship ETF, hit a five-year low on Wednesday.
Expectations for an extensive period of restrictive monetary policy and the likelihood of a recession as a result have dashed investor hopes for a year-end rally. December is a historically bullish month for the stock market, but it appears to be anything but this season, with stocks on a steady downtrend after an upbeat October and November.
“With inflation expected to remain higher than the past decade and money supply still near a record high, there is still too much liquidity that needs to be drained,” Verdence Capital Management Chief Investment Officer Megan Horneman said in a note. “This means that the days of the Fed coming in and cutting rates to zero at any sign of economic weakness are behind us.
“Instead, expect more volatility in economic growth and potentially more frequent mild recessions over the next decade,” she added.
On the earnings side, results from Nike (NKE) and FedEx (FDX) are due out after the close.
Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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