U.S. stocks were down at close after choppy trading on Thursday as markets attempted to recover from a sell-off in the previous session sparked by worries around more imminent rate hikes from the Federal Reserve.
The Nasdaq clawed back in intraday trading but ended in the red, remaining on pace for its biggest weekly decline since November after Wednesday's 3.3% drop marked the benchmark's worst single-day session since last February. The Dow and S&P 500 also closed lower.
Employment data has been in the spotlight this week, with the Labor Department’s key monthly jobs report due for release on Friday.
The read on December’s numbers is expected to offer a more meaningful look at the strength of hiring and labor force participation — key measures of the U.S. economy, made even more consequential as markets continue to mull the full impact of the Omicron COVID wave. Economists anticipate the report will show a month of solid job growth before the latest virus surge meaningfully impacted the labor market, with consensus estimates at 444,000.
Investors also weighed a fresh read on initial weekly jobless claims Thursday morning that showed first-time unemployment filings ticked up but remained near a 52-year low last week, signaling continued recovery in the labor market as high demand for workers pours into the new year.
Continued pressures in tech persisted into Thursday, with a near-record number of technology stocks seeing market values halve from their 52-week highs, according to Bloomberg Data.
“If you get nervous over a 4% or 5% pullback, you probably shouldn’t have a lot of money in stocks,” Wells Fargo Wealth & Investment Management senior global equity strategist Scott Wren told Yahoo Finance Live. “Whether the Fed puts its first hike in March or in June, you’re splitting hairs there within a few months.”
OANDA market analyst Craig Erlam shared similar sentiments with Yahoo Finance Live.
“Markets need time to settle, we’ve got the earnings season starting in a couple weeks’ time,” he said. “I think that’s when people start to get a better grasp, or at least look at these markets through a more rational lens.”
Still, the pace of interest rate hikes remains a key component of investors’ outlook for 2022. Markets will continue to assess the rate of inflation into the new year and keep a close eye on how aggressively the Federal Reserve may choose to intervene.
"We think inflation is likely peaking now," Cresset Capital chief investment officer Jack Ablin told Yahoo Finance Live. "We think the natural path of inflation is going to trend lower, but either way, it looks like inflation will likely trend back to 2 1/4, 2 1/2, by the end of the year."
“The primary piece of the puzzle is the Fed,” Zephyr market strategist Ryan Nauman told Yahoo Finance Live. “Markets don’t really react too greatly to when the Fed starts hiking rates — it’s the pace — and if the Fed increases the pace of interest rate hikes and there are a couple of surprise hikes in there to tame inflation, that’s when we can really get an impact on equity markets and see a steep pullback.”
4:01 p.m. ET: Stocks close down for second straight session
Here were the main moves at Thursday's market close:
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S&P 500 (^GSPC): -4.53 (-0.10%) to 4,696.05
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Dow (^DJI): -170.57 (-0.47%) to 36,236.54
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Nasdaq (^IXIC): -19.31 (-0.13%) to 15,080.87
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Crude (CL=F): +$1.61 (+2.07%) to $79.46 a barrel
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Gold (GC=F): -$37.30 (-2.04%) to $1,787.80 per ounce
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10-year Treasury (^TNX): +2.8 bps to yield 1.7330%
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3:17 p.m. ET: Royal Caribbean stock slides after short call
Shares of Royal Caribbean Cruises (RCL) fell nearly 4% during afternoon trading after Hindenburg Research tweeted that they were short the company.
"We are short $RCL, which we believe to be one of the most dislocated 're-opening' stocks on the market today," the firm wrote. "The outlook for $RCL and the cruise industry is far more grim than other hospitality and leisure 'post-Covid' stories."
Royal Caribbean was trading down 3.01% as of 3:17 p.m. to $78.19 per share.
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3:03 p.m. ET: Nasdaq sell-off echoes dot-com crash
The Nasdaq Composite is on pace for its biggest weekly decline since November, even as it rose in intraday trading session on Thursday, according to Bloomberg data. Wednesday's loss of 3.3% marked its worst single-day session since last February.
A near-record number of technology stocks have dropped by around 50%, resembling the dot-com crash. Bloomberg data indicated roughly four in every 10 companies on the Nasdaq have seen their market values halve from their 52-week highs.
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2:30 p.m. ET: Meme stocks jump after individual traders step in
Retail investors helped lift beaten down meme stocks after a volatile start to the trading session for the group after Bed Bath & Beyond Inc. (BBBY) reported quarterly results that missed estimates on the top and bottom lines and slashed its full-year forecast.
The cohort of stocks favored by retail traders, including GameStop Corp. (GME) and Express Inc. (EXPR) clawed back after rebounding from their worst day since June, according to Bloomberg data.
Bed Bath & Beyond was up 10.81% in intraday trading as of 1:28 p.m. to $14.81 after jumping as much as 23% earlier in the session. GameStop was up 2.24% to $132.27 per share and Express ticked 2.62% higher to $3.13 per share.
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11:35 a.m. ET: Mortgage rates soar to highest level since May 2020
Mortgage rates rose to their highest level in more than a year and a half after details from the Federal Reserve's last policy-setting meeting released on Wednesday hardened expectations for a higher interest-rate environment.
The rate on the 30-year fixed mortgage jumped from 3.11% to 3.22% this week, according to Freddie Mac. The increase on the rate — the most common loan used by homebuyers — places it at the highest level since May 2020.
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11:28 a.m. ET: Dow turns negative year-to-date
Here were the main moves in markets as of 11:28 a.m. ET:
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S&P 500 (^GSPC): +0.85 (+0.02%) to 4,701.43
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Dow (^DJI): -118.85 (-0.33%) to 36,288.26
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Nasdaq (^IXIC): +17.53 (+0.12%) to 15,117.70
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Crude (CL=F): +$1.90 (+2.44%) to $79.75 a barrel
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Gold (GC=F): -$34.60 (-1.90%) to $1,790.50 per ounce
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10-year Treasury (^TNX): +3.4 bps to yield 1.7390%
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11:00 a.m. ET: New orders for U.S.-manufactured goods surge in November
The Commerce Department reported Thursday morning that U.S. factory orders accelerated in November, climbing 1.6% during the month.
October's estimate was revised higher to show orders rising 1.2% instead of 1.0% as previously reported.
The agency reported that despite the increase in orders, business spending on equipment likely struggled to rebound in the fourth quarter.
Manufacturing accounts for 11.9% of the economy and is supported by businesses restoring expended inventories.
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10:45 a.m. ET: Rivian tumbles below IPO price
Shares of electric vehicle-market Rivian (RVN) slumped nearly 17%, falling below their IPO price of $78 for the first time amid a broader sell-off in electric vehicle stocks.
The drop also comes one day after rival investor Amazon.com Inc. (AMZN) signed a deal with Fiat and Alfa Romeo carmaker Stellantis NV to develop vans that use the commerce giant's software and deploy electric delivery vans made by the Italian automaker.
Rivian fell 3% to end at a record closing low of $87.33 per share. Amazon closed down slightly at about $3,265.08 a share.
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9:30 a.m. ET: Markets see muted open following Fed-prompted sell off
Here were the main moves at the start of Thursday's trading session:
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S&P 500 (^GSPC): -1.77 (-0.04%) to 4,698.81
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Dow (^DJI): -7.92 (-0.02%) to 36,399.19
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Nasdaq (^IXIC): -57.40 (-0.38%) to 15,042.77
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Crude (CL=F): +$2.18 (+2.80%) to $80.03 a barrel
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Gold (GC=F): -$37.10 (-2.03%) to $1,788.00 per ounce
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10-year Treasury (^TNX): +2.5 bps to yield 1.7300%
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9:05 a.m. ET: November U.S. trade deficit nears record high
The U.S. is on pace to see its biggest annual trade deficit.
The Commerce Department reported on Thursday that November's read jumped to a near-record $80.2 billion, 19.3% higher than the October deficit of $67.2 billion and just below the all-time monthly record of $81.4 billion reported in September.
The agency's final estimate is set to be reported next month.
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8:30 a.m. ET: Jobless claims up from prior week but hold at pre-COVID lows
First-time unemployment filings ticked up but remained near a 52-year low last week, signaling continued recovery in the labor market as high demand for workers pours into the new year.
The Labor Department's latest read on initial jobless claims showed 207,000 Americans filed for unemployment in the week ending January 1. The figure was up from consensus Bloomberg estimates of 195,000 but hovered around the key 200,000 level. The previous week's print of 198,000 marked the second lowest number of claims during the pandemic.
Continuing claims came in at 1.754 million, compared to an expected 1.678.
"Fortunately for workers, employers have not been in a rush to cut jobs. New claims for unemployment benefits remain near decades-low levels," Mark Hamrick, senior economic analyst for Bankrate, wrote in an email. "The question remains whether there will be sufficient workers to fill available positions and how many individuals will be willing to re-join the labor force, by working or looking for work."
7:00 a.m. ET: Futures contracts mixed following Wednesday sell-off
Here were the main moves ahead of market open:
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S&P 500 futures (ES=F): -0.75 points (-0.02%), to 4,691.75
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Dow futures (YM=F): +72.00 points (+0.20%), to 36,363.00
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Nasdaq futures (NQ=F): -70.00 points (-0.44%) to 15,696.50
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Crude (CL=F): +$0.93 (+1.19%) to $78.78 a barrel
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Gold (GC=F): -$27.80 (-1.52%) to $1,797.30 per ounce
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10-year Treasury (^TNX): +0.00 bps to yield 1.705%
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6:02 p.m. Wednesday ET: Stock futures open sideways after equities deepen losses
Here were the main moves in markets heading into the overnight session:
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S&P 500 futures (ES=F): -92.25 points (-1.93%), to 4,692.00
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Dow futures (YM=F): +33.00 points (+0.09%), to 36,324.00
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Nasdaq futures (NQ=F): -1.50 points (-0.01%) to 15,765.00
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Crude (CL=F): -$0.75 (-0.96%) to $77.10 a barrel
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Gold (GC=F): -$14.30 (-0.78%) to $1,810.80 per ounce
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10-year Treasury (^TNX): +2.2 bps to yield 1.705%
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Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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