Stock Market Today: Economic Data, Hawkish Fed Drag Stocks Lower Again
The major market indexes finished off their session lows, but still notched back-to-back weekly losses.
You are now subscribed
Your newsletter sign-up was successful
Want to add more newsletters?
Delivered daily
Kiplinger Today
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more delivered daily. Smart money moves start here.
Sent five days a week
Kiplinger A Step Ahead
Get practical help to make better financial decisions in your everyday life, from spending to savings on top deals.
Delivered daily
Kiplinger Closing Bell
Get today's biggest financial and investing headlines delivered to your inbox every day the U.S. stock market is open.
Sent twice a week
Kiplinger Adviser Intel
Financial pros across the country share best practices and fresh tactics to preserve and grow your wealth.
Delivered weekly
Kiplinger Tax Tips
Trim your federal and state tax bills with practical tax-planning and tax-cutting strategies.
Sent twice a week
Kiplinger Retirement Tips
Your twice-a-week guide to planning and enjoying a financially secure and richly rewarding retirement
Sent bimonthly.
Kiplinger Adviser Angle
Insights for advisers, wealth managers and other financial professionals.
Sent twice a week
Kiplinger Investing Weekly
Your twice-a-week roundup of promising stocks, funds, companies and industries you should consider, ones you should avoid, and why.
Sent weekly for six weeks
Kiplinger Invest for Retirement
Your step-by-step six-part series on how to invest for retirement, from devising a successful strategy to exactly which investments to choose.
It was a terrible end to a terrible week, with markets suffering another big loss on Friday. Recession fears continue to mount, with today's services and manufacturing data only adding to concerns over a slowing economy. And hawkish talk from Federal Reserve officials only reinforced Fed Chair Jerome Powell's message from Wednesday's press conference that the central bank is willing to keep raising interest rates and hold them higher for longer in order to tame inflation. But in addition to rising recession worries, there was another factor that likely amplified the selloff.
Beginning with that economic data. The preliminary reading for the S&P Global U.S. services sector index fell to a four-month low of 44.4 in December from November's reading of 46.2. Additionally, the S&P Global U.S. manufacturing index fell to 46.2 from 47.7, marking its lowest reading in 31 months. The data show that activity in both the services and manufacturing sectors continue to fall further into contraction territory.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Meanwhile, New York Fed President John Williams and San Francisco Fed President Mary Daly said in separate interviews that the central bank needs to continue with its aggressive campaign of interest rate hikes to bring inflation down even further. "We're going to have to do what's necessary," Williams said in an Bloomberg TV interview, adding that the federal funds rate "could be higher than what we've written down." The most recent dot plot showed that most Fed policymakers are targeting a terminal rate of 5.0% to 5.25%, about 75 basis points higher than where it currently stands.
In addition to the economic data and Fed speak, today marked quadruple-witching expiration, which is when index futures, index options, stock options and individual-stock futures all expire at once. "After yesterday's market selloff, the tone of today's market could be affected by the approximately $4 trillion of options that could expire in today's trading session," says Quincy Krosby, chief global strategist for LPL Financial. "Market volume increases during major expiration days, and that can usually move a nervous market in one direction or another."
The S&P 500 Index was the biggest loser today, shedding 1.1% to 3,852. But the Nasdaq Composite (-1% at 10,705) and the Dow Jones Industrial Average (-0.9% at 32,920) weren't far behind.
META Stock: One of the Best Value Plays?
Will the market see a Santa Claus rally this year? That's what is top of mind after the major market indexes just wrapped up their first back-to-back weekly losses since September.
The prospect of a Santa Claus Rally, which technically encompasses the last five trading days of the year and the first two of the new year, "is fading as we near the end of 2022, very much in keeping with how the rest of the year has unfolded," says Craig Erlam, senior market analyst at currency provider OANDA. "Going into December, there was growing optimism that policymakers could be a source of optimism going into the new year but instead, they've taken on the role of grinch, bringing a swift end to the celebrations."
Still, "Santa could arrive next week to provide holiday greetings and help underpin an even deeper 'oversold' rally, even if it's not within the technical definition of when he's supposed to arrive," Krosby says. "The market doesn't care when he arrives, just that he actually shows up!"
For those that are keeping with the holiday spirit, there are plenty of opportunities for upside among the best value stocks. Among them is Facebook parent Meta Platforms (META). META stock managed to buck today's broad-market selloff in a big way, climbing higher after another analyst upgraded the one-time mega cap. Read on as we take a closer look at the investment case for META stock.
-
5 Investing Rules You Can Steal From MillennialsMillennials are reshaping the investing landscape. See how the tech-savvy generation is approaching capital markets – and the strategies you can take from them.
-
The Tool You Need to Avoid a Post-Divorce Administrative NightmareLearn why a divorce decree isn’t enough to protect your retirement assets. You need a QDRO to divide the accounts to avoid paying penalties or income tax.
-
When Estate Plans Don't Include Tax Plans, All Bets Are OffEstate plans aren't as effective as they can be if tax plans are considered separately. Here's what you stand to gain when the two strategies are aligned.
-
Big Change Coming to the Federal ReserveThe Lette A new chairman of the Federal Reserve has been named. What will this mean for the economy?
-
Job Growth Sizzled to Start the Year. Here's Why It's Unlikely to Impact Interest RatesThe January jobs report came in much stronger than expected and the unemployment rate ticked lower to start 2026, easing worries about a slowing labor market.
-
I'm a 55-Year-Old Dad. Here’s How My 28-Year-Old Daughter Showed Me That AXP Is Still a Solid InvestmentAmerican Express stock is still a solid investment because management understands the value of its brand and is building a wide moat around it.
-
Why the Next Fed Chair Decision May Be the Most Consequential in DecadesKevin Warsh, Trump's Federal Reserve chair nominee, faces a delicate balancing act, both political and economic.
-
The New Fed Chair Was Announced: What You Need to KnowPresident Donald Trump announced Kevin Warsh as his selection for the next chair of the Federal Reserve, who will replace Jerome Powell.
-
If You'd Put $1,000 Into AMD Stock 20 Years Ago, Here's What You'd Have TodayAdvanced Micro Devices stock is soaring thanks to AI, but as a buy-and-hold bet, it's been a market laggard.
-
January Fed Meeting: Updates and CommentaryThe January Fed meeting marked the first central bank gathering of 2026, with Fed Chair Powell & Co. voting to keep interest rates unchanged.
-
If You'd Put $1,000 Into UPS Stock 20 Years Ago, Here's What You'd Have TodayUnited Parcel Service stock has been a massive long-term laggard.
