[New York Stock Market] Waiting for CPI and FOMC, Nasdaq down 0.51%...

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] The U.S. New York stock market closed mixed and flat on the 7th (local time) amid ongoing recession concerns, awaiting the Federal Reserve's December Federal Open Market Committee (FOMC) regular meeting scheduled for next week.

On this day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average rose 1.58 points (0.0%) from the previous session to close at 33,597.92. The large-cap focused S&P 500 index fell 7.34 points (0.19%) to 3,933.92, and the tech-heavy Nasdaq index dropped 56.34 points (0.51%) to close at 10,958.55.

Investors showed caution, closely watching the Fed's interest rate hike trajectory and recession concerns ahead of the December FOMC meeting. Amid heightened economic uncertainty, many investors adopted a wait-and-see stance. China's easing of COVID-19 restrictions was insufficient to boost market sentiment.

Ryan Detrick, Chief Market Strategist at Carson Group, said, "After a significant rebound from the October lows, the stock market is taking a breather and contracting," adding that this trend is expected to continue until the Fed's December FOMC meeting and November Consumer Price Index (CPI) clarify the future direction.

By sector, weakness was observed mainly in communication, technology, financials, and utilities within the S&P 500 index. Conversely, healthcare and real estate sectors showed gains.

Campbell Soup closed up 6.02% from the previous session, buoyed by earnings that exceeded market expectations, marking a 52-week high. The company also raised its annual earnings guidance that day. Database platform MongoDB surged over 23% on better-than-expected earnings and annual outlook. Used car company Carvana, engulfed in bankruptcy concerns, plummeted 42.92% after news of negotiations with creditors. Leading tech stock Tesla retreated 3.21%, with its stock price down more than 50% year-to-date.

In the New York bond market, U.S. Treasury yields fell across the board. The 10-year Treasury yield briefly dropped to 3.402%, threatening the 3.4% level. The 2-year yield, sensitive to monetary policy, also declined to around 4.235% before narrowing losses to 4.256%. The inversion of the yield curve, where the long-term 10-year yield falls below the 2-year and 3-month yields, continued. This phenomenon is typically interpreted as a recession warning.

Known as the "Money Tree Sister," Cathie Wood, founder of ARK Investment, criticized on Twitter the significant widening of the yield spread between the 2-year and 10-year notes, calling it "a signal from the bond market that the Fed is making a serious mistake." She noted that the current yield curve inversion is more severe than in the early 1980s when double-digit inflation was recorded. The 10-year yield has been below the 2-year yield for 102 trading days.

Citigroup also pointed out that the inversion between the 30-year and 3-month yields is at an all-time high, raising recession concerns. The market regards the inversion between the 30-year and 3-month yields as very rare. As of this day, the 30-year yield hovered around 3.42%, while the 3-month yield was near 4.29%. On the same day, the Chicago Board Options Exchange (CBOE) Volatility Index (VIX), known as Wall Street's "fear gauge," jumped over 2.3% to 22.6.

Azhar Iqbal of Wells Fargo warned in an investor memo that "all financial indicators point to a recession." He added, "The S&P 500 index typically peaks about four months before a recession during previous cycles."

However, the U.S. productivity data released that day showed improvement. U.S. nonfarm productivity for the third quarter was revised to an annualized increase of 0.8% quarter-over-quarter on a seasonally adjusted basis, better than the preliminary estimate of 0.3% and marking the first increase this year.

Investors are now focusing on other economic indicators scheduled for release the next day, such as weekly jobless claims. Later this week, producer price index and consumer sentiment data will also be published.

Oil prices fell amid ongoing recession concerns and news of inventory increases. On the New York Mercantile Exchange, January West Texas Intermediate (WTI) crude oil futures dropped $2.24 (3.02%) from the previous session to close at $72.01 per barrel, marking the fourth consecutive day of decline.