by David French
NEW YORK (Reuters) – Wall Street ended in the red and the S&P 500 recorded its fourth consecutive session of declines on Tuesday, uncertainty over the path of interest rates in the United States and warnings about a possible recession weighing on investor sentiment.
The Dow Jones index closed down 1.03% at 33,596.34 points, the S&P 500 1.44% at 3,941.26 and the Nasdaq Composite fell 2% at 11,014.89.
Among the S&P’s biggest declines, Meta Platforms stock tumbled 6.8% after a Wall Street Journal report said European regulators ruled Facebook or Instagram didn’t have to tax their users to accept personalized ads based on their digital activity.
However, almost all of the S&P’s sector indices lost ground, especially technology stocks, energy and telecommunications. Only community service groups, defensive stocks favored in times of uncertainty, fared well (+0.7%).
The nervousness of investors was accentuated on Tuesday by several warnings issued by financial giants on the risks of recession next year in the United States.
Bank of America chief executive Brian Moynihan predicted three quarters of moderate activity contraction in 2023. JPMorgan Chase chief executive Jamie Dimon said he expected a “mild or deeper” recession due to inflation which reduces consumers’ ability to spend.
“We generally expect the economy to contract in the first two quarters of next year, that’s going to have an impact on the results, that’s what investors are focusing on,” said Hugh Johnson, of Hugh Johnson Economics in Albany, New York.
Bank of America dropped 4.2%.
Growth concerns add to questions over the pace of the Federal Reserve’s rate hike after strong jobs data on Friday and services activity on Monday cast doubt on the scenario of more moderate rate hikes, thanks to which the S&P 500 gained almost 14% in October and November.
* The reminder of the session in Europe: [.EUFR]
(Written by Jean-Stéphane Brosse)
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