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.
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.
-
How to Avoid the Financial Quicksand of Early Retirement LossesSequence of returns — experiencing losses early on — can quickly deplete your savings, highlighting the need for strategies that prioritize income stability.
-
How an Elder Law Attorney Can Help Protect Your Aging ParentsIf you are worried about older family members or friends whose financial judgment is raising red flags, help is out there — from an elder law attorney.
-
Q4 Post-Mortem From an Investment Adviser: Year of ResilienceFinancial pro Prem Patel shares his take on how markets performed in the fourth quarter of 2025, with an eye toward what investors should keep in mind for 2026.
-
If You'd Put $1,000 Into Lowe's Stock 20 Years Ago, Here's What You'd Have TodayLowe's stock has delivered disappointing returns recently, but it's been a great holding for truly patient investors.
-
If You'd Put $1,000 Into 3M Stock 20 Years Ago, Here's What You'd Have TodayMMM stock has been a pit of despair for truly long-term shareholders.
-
The November CPI Report Is Out. Here's What It Means for Rising PricesThe November CPI report came in lighter than expected, but the delayed data give an incomplete picture of inflation, say economists.
-
The Delayed November Jobs Report Is Out. Here's What It Means for the Fed and Rate CutsThe November jobs report came in higher than expected, although it still shows plenty of signs of weakness in the labor market.
-
December Fed Meeting: Updates and CommentaryThe December Fed meeting is one of the last key economic events of 2025, with Wall Street closely watching what Chair Powell & Co. will do about interest rates.
-
If You'd Put $1,000 Into Coca-Cola Stock 20 Years Ago, Here's What You'd Have TodayEven with its reliable dividend growth and generous stock buybacks, Coca-Cola has underperformed the broad market in the long term.
-
If You Put $1,000 into Qualcomm Stock 20 Years Ago, Here's What You Would Have TodayQualcomm stock has been a big disappointment for truly long-term investors.
-
The Delayed September Jobs Report Is Out. Here's What It Means for the FedThe September jobs report came in much higher than expected, lowering expectations for a December rate cut.
