Wall Street Appears Headed for First Weekly Loss of 2023

Date: 20 January 2023 - 21:33

News ID: ۱۱۱۵۳۷

NEW YORK (AP) - Premarket trading on Wall Street was mixed Friday as recession fears threaten to drag major indexes to their first weekly decline of the year.
Futures for the Dow are flat after early declines, while the S&P 500 is up 0.3%. The Dow is down almost 4% this week, the S&P is down 2.5%, and the tech heavy Nasdaq composite is down 2% this week amid tens of thousands of layoffs across the sector.
Growing concern that the Federal Reserve and other central banks will keep interest rates elevated for an extended period — even if it means letting major economies slip into recession — has gripped markets this week.
In separate appearances Thursday, Fed board member Lael Brainard and European Central Bank President Christine Lagarde affirmed plans to maintain heightened interest rates despite hints that inflation and economic growth is cooling.
“That again implies more hikes to come and then a long hiatus, not the imminent reversal markets are pricing for,” Rabobank said in a report.
Recent economic data has shown weakness in the U.S. housing industry and manufacturing in the mid-Atlantic region, though they weren’t as bad as expected and the job market appears healthy. Those followed worse readings than expected Wednesday on retail sales, a cornerstone of the economy, and industrial production.
Some economists expect a U.S. recession this year but most expect that if it does occur, it will be brief.
The Fed’s key lending rate is 4.25% to 4.50%, up from close to zero one year ago. Its next rate decision will be announced Feb. 1. Analysts expect an increase of 0.25 percentage points, smaller than previous hikes of up to 0.75 percentage points.
Job cuts in the technology sector continued Friday, with Google parent company Alphabet announcing that it was laying off 12,000 workers. Earlier this week, Microsoft announced 10,000 job cuts, or nearly 5% of its workforce. Amazon is cutting 18,000 jobs and Facebook parent Meta is shedding 11,000 positions.
Other tech companies have also announced staff reductions that come after rapid expansion in the sector during the pandemic.