Falling bond yields failed to support the stock market, with the 10-year yield at 3.41%, down 10 basis points.
The S&P 500 ended lower for a fifth straight session as traders began to weigh in on the possibility of a recession and with it the possibility of a longer period of interest rate hikes by the Federal Reserve.
The S&P 500 fell 0.19% to 3,933.92, the Dow Jones edged up 1.58 points to 33,597.92, while the Nasdaq fell 0.51% to 10,958.55.
Falling bond yields failed to support the stock market, with the 10-year yield at 3.41%, down 10 basis points.
Yesterday’s session was characterized by intense volatility, with stocks moving between gains and losses and with the S&P 500 temporarily up 0.41%. At session lows, the index fell 0.47%.
The market is expected to continue today’s trend until investors get clearer clues from next week’s Fed meeting and November US consumer price data.
Although the Fed is expected to cut its pace of rate hikes to 50 from 75 basis points so far, there are strong concerns about whether the US central bank is able to achieve a soft landing, bringing inflation under control .
Concerns about a possible recession in 2023 have begun to grip some investors in recent days, with inflation potentially pushing the economy into recession.
Coupled with the inverted yield curve in the government bond market, markets are discounting a recession next year.
So far this week, all three major stock indexes are down: the Dow Jones is down 2.42%, the S&P 500 is down 3.38% and the Nasdaq is down 4.39% respectively.
The S&P 500 is expected to close 2023 up 9.1% from Tuesday’s close. Bearish pressure on the index is expected to ease by the end of 2023, taking it to 4,300 points, which is 350 points higher than its last close.
