U.S. stocks rose Tuesday as Wall Street tried to start the new year on a strong note.
The Dow Jones Industrial Average climbed 75 points, or 0.23%. The S&P 500 rose 0.45% and the Nasdaq Composite gained 0.88%. Shares of Tesla slipped following disappointing fourth quarter deliveries.
Investors are looking for signs that the global economy will continue to recover in 2023 and lift stocks as issues that weighed on markets in 2022 subside. While there are fears that the Federal Reserve’s rate hikes to tame high inflation could push the U.S. economy into a recession, it would also likely lead to a pause in rate increases or a pivot to cutting rates in the latter part of the year, which could boost equities.
“We continue to see ‘the glass half full’ as the end of a period of ‘free money’ and overstimulation of the economy suggest better times could lie ahead for both equity and bond markets as the New Year progresses,” wrote John Stoltzfus, chief investment strategist at Oppenheimer, in a Tuesday note.
History also shows theU.S. stock market tends to rebound after down years.In fact, the S&P 500 has, on average, rebounded by 15% in the next year following a year where it lost more than 1%.
The major averages closed 2022 with their worst annual losses since 2008, snapping a three-year win streak. The Dow ended the year down about 8.8%, and 10.3% off its 52-week high. The S&P 500 lost 19.4% for the year and sits more than 20% below its record high. The tech-heavy Nasdaq tumbled 33.1% last year.
Investors are getting a bundle of data in the first trading week of the year that will give further information on the state of the economy. First up are S&P Global manufacturing PMI and construction spending, due out at 9:45 a.m. and 10 a.m. ET on Tuesday.
Wednesday is a big day with the Job Openings and Labor Turnover Survey, better known as JOLTS, due out in the morning and the minutes of the Fed’s latest policy meeting set to come out in the afternoon.
They’re also looking forward to Friday’s December jobs report, the final employment report the Fed will have to consider before its next meeting on Feb. 1. There are also several speeches by Fed presidents scheduled Thursday and Friday.
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