4.00pm: Markets glad to see the end of rough year
Investors bid 2022 adieu with stocks in the red to close out a year many wish to forget.
At the final trading session of the year, the Dow closed 0.2% lower at 33,147 points, the S&P 500 lost 0.3% at 3,840 and the Nasdaq finished at 10,466 points for a loss of 0.1%.
Looking ahead, the first week of January will bring the first important macro data: the minutes of the FOMC’s December meeting.
At that meeting, the FOMC reduced the pace of tightening to 50 basis points but appeared more hawkish than expected, in that policymakers projected a higher terminal interest rate and indicated that monetary policy will remain contractionary for longer, said Forex.com's Fawad Razaqzada.
"The minutes should reveal more details, which should set the tone for next few days at least," Razaqzada said.
The first week of January could end with a bang, if US employment data shows a major surprise, the analyst added.
"The headline non-farm payrolls number has beaten expectations in each of the previous 8 months, with the prior months continually being revised higher. US jobs market remains hot, and while that’s the case, the Fed will be encouraged to keep its policy tight. If we get another set of stronger-than-expected numbers, then this could provide renewed support for the dollar."
12.00pm: Nasdaq set to lose 30% in 2022
Wall Street saw choppy trading on Friday as the Nasdaq was set to finish around 30% lower and the S&P 500 was on pace for its worst year since 2008.
At noon, the Dow was down 0.6% at 33,011 points, the S&P 500 lost 0.7% at 3,822 and the Nasdaq fell 0.8% at 10,393.
"It would appear investors are positioned for an opening quarter of significant uncertainty, which is about right," OANDA's Craig Earlam opined.
"So much now hangs on the economic data and how companies plan to adapt to a potentially impending recession. The data towards the back end of 2022 wasn't as promising as hoped and the communication from the Fed and others has remained more hawkish than investors would like."
9.35am: Tech stock selloff continues
The final trading day of 2022 has kicked off with all three major US indexes in the red.
Forex.com market analyst Matt Weller said the biggest story from the past week was the big selloff in US stocks, specifically former market darling Tesla Inc and the tech-heavy Nasdaq 100 index.
“Tesla is winding down a brutal month wherein it lost about 40% of its value,” he said.
Weller noted that there was speculation that the selloff was related to Tesla CEO Elon Musk’s new acquisition of Twitter, ranging from whether Twitter is merely distracting him from his auto company to concerns about his increasingly erratic tweets to worries that Musk is being forced to sell his stake in Tesla in margin call to support those who bankrolled the Twitter acquisition.
“Regardless of the exact catalyst, Tesla is at its lowest level since August 2020, and the broader Nasdaq 100 has fallen to test similar lows in sympathy,” he said.
Just after the market opened, Tesla had added 0.9%, trading at US$122.86.
The Nasdaq Composite had shed 120 points or 1.2% at 10,358 points, while the Dow Jones Industrial Average had lost 186 points or 0.6% at 33,045 points and the S&P 500 was down 30 points or 0.8% at 3,820 points.
7am: Stocks on track for biggest yearly losses since 2008
US stocks are looking to open lower in the final trading session of 2022, with all three major indexes set for their biggest yearly losses since 2008.
Futures for the Dow Jones Industrial Average (DJIA) were off 0.3% in pre-market trading on Friday, while contracts for the S&P 500 and for the Nasdaq 100 both lost 0.4%.
The three major indexes managed a late surge on Thursday, with technology shares leading the way after a recent sell-off. At the close, the DJIA had gained 345 points to 33,221, while the S&P 500 added 66 points at 3,849 and the tech-heavy Nasdaq climbed 265 points to 10,478.
Ipek Ozkardeskaya, senior analyst at Swissquote Bank commented: "US indices rallied yesterday, in an effort to recover a part of the past few session losses, rather than a fresh move, on fresh news, as there was no fresh news yesterday.
"But yesterday’s jump in US indices was relatively strong, perhaps due to thin trading volumes that make look the year-end moves impressive, while they are not.
"Anyway, the S&P 500 gained 1.75% yesterday, and could maybe finish the year with less than a 20% loss, while Nasdaq jumped more than 2.50%, but will still end the year with more than a 30% drawdown. Things have changed so much in one year!"
Tesla Inc shares rallied about 1% higher ahead of the opening bell but the electric-vehicle maker's stock has endured a rollercoaster month of trading, and is on pace to end 2022 as the worst performer among major S&P 500 stocks.