4.12pm: S&P down for a fifth day in a row
US markets ended a more subdued trading session little changed pausing for breath after the recent volatility as investors look ahead to next week’s FOMC meeting.
At the close the Dow Jones Industrial Average was up 1 point at 33,597, the S&P 500 fell, for a fifth consecutive day, by 7 points, or 0.2%, to 3,934 while the Nasdaq Composite dipped 56 points, or 0.5%, 10,959.
“The market’s kind of bobbing and weaving and finding its breath after the big rally off the October lows,” Ryan Detrick, chief market strategist at the Carson Group told CNBC.
He expected markets to continue this trend until investors receive more clarity from the Fed’s December policy meeting and November’s CPI report.
Stocks on the move included online used car seller, Carvana Co. (NYSE:CVNA), which fell 40%, after two of its largest creditors signed an agreement to negotiate together with the company prompting Wedbush to lower its price target to just $1.
Shares in asset manager, State Street, jumped more than 7.6% after the company announced a new $1.5 billion share buy-back plan while luxury homebuilder, Toll Brothers, rose 7% after better-than-expected numbers.
12pm: US stocks move between gains and losses
US markets moved in and out of the red on Wednesday morning trade as predictions of a global recession and even higher interest rates were countered by an easing of COVID restrictions in China.
At midday, the Dow was up just 5 points, or 0.01%, to 33,601, the S&P 500 eased back 5 points, or 0.1%, to 3,936 and the Nasdaq Composite was 52 points, or 0.5%, lower at 10,936.
Stronger than expected US wage and employment data and warnings of a looming recession from the chiefs executives of major Wall Street banks have resulted in four days of losses on Wall Street. While the Dow and the S&P 500 traded higher mid-morning, the indices struggled to hold onto their gains.
“With the recent losses attributed to last Friday’s earnings rise, this coming Friday provides yet another inflation indicator in the form of the PPI factory pricing figure,” said Joshua Mahony, senior market analyst at online trading platform IG.
“Nonetheless, with China starting to moderate their Covid restrictions, there is a hope that the economic suffering in the West will be counteracted by an Asia-led rebound in growth.”
9.35am: Chinese data highlights challenges facing global economy
US stocks opened in the red on Wednesday as investors pondered the potential outcomes of the Fed’s upcoming rate-setting meeting amid disappointing economic data from China, which showed both imports and exports declined last month despite signs the country is relaxing its zero-COVID policy.
Just after the market opened, the Dow Jones Industrial Average had slipped 37 points or 0.1% at 33,559 points, the S&P 500 was down 8 points or 0.2% at 3,933 points, and the Nasdaq Composite had shed 33 points or 0.3% at 10,983 points.
OANDA senior market analyst Craig Erlam said equity markets were struggling again on Wednesday, with the latest Chinese trade data highlighting the challenges facing the global economy going into 2023.
“It would appear the recovery in stocks, bear market rally or otherwise, has run out of steam, and investors are left wondering whether what follows next is another test of the lows or simply a correction of that impressive two-month surge,” he said.
He added that the difficulty investors had now was balancing the coming end of the tightening cycle with a potential global recession next year amid heavily discounted valuations.
“There's clearly an urge to take advantage of the latter without any real foresight into how bad the decline is going to be, which is what makes it tricky, and also why some are referring to the move since October as a bear market rally,” Erlam said.
6.30am: US markets set for a fifth day of losses
Wall Street is expected to open lower as concern about a US recession adds to worries that the Federal Reserve will continue on its path of hiking interest rates by 75 basis points when its rate-setting committee meets next week.
Futures for the Dow Jones Industrial Average fell 0.1% in Wednesday pre-market trading, while those for the broader S&P 500 index dropped 0.2% and the Nasdaq shed 0.3%.
Stocks declined on Tuesday as the chief executives of major Wall Street banks including Bank of America Corp (NYSE:BAC) and Goldman Sachs (NYSE:GS) predicted a recession in the US in 2023, while JP Morgan also warned about the impact of inflation on consumer spending.
The S&P closed 1.4% lower at 3,941, while the Dow slipped 1% to 33,596 and the Nasdaq sank 2% to 11,015.
Energy markets weren't spared the growing economic headwinds, with the price of Brent Crude Oil setting below $80 per barrel for the first time since January.
“Having seen another lacklustre and negative session for European and US markets yesterday there appears very little interest to drive markets higher in the short term, as we look ahead to next week’s central bank meetings from the Federal Reserve, as well as the European Central Bank and Bank of England,” said Michael Hewson, chief market analyst at CMC Markets UK.
“While US markets finished lower for the fourth day in succession, oil prices also fell sharply over concerns that a stickier inflation outlook increases the prospect of a weaker economy heading into 2023."
Markets are also shrugging off reports that China is taking measures to reopen its economy following strict COVID lockdowns, added James Hughes, chief market analyst at Scope Markets.
“With the Fed set to persist with the policy tightening agenda and this fuelling concerns that the US economy could be tipped into recession, even the idea of China easing those draconian COVID lockdown restrictions doesn’t seem to be offering up much support,” Hughes said.
“Economic data remains thin on the ground, although weekly mortgage application numbers could offer up some interest, depending just how sharp any contraction is here. Earnings news is also rather limited but GameStop, one of the so-called meme-stocks, has Q3 numbers after the bell tonight,” he said.