Stocks fell on Tuesday as the final week of trading for 2022 began and investors weighed the economic outlook for 2023.
The Dow Jones Industrial Average was last up 122 points, or 0.35. The S&P 500 was flat, while the Nasdaq Composite was down 0.7%.
China-linked stocks rose as the country eased Covid restrictions. Tesla fell 5% on news of an extended production break, while Southwest fell 4% as the airline canceled thousands of flights.
Yields also rose, putting pressure on growth stocks like tech.
Stocks are headed for their worst annual performance since 2008 and another down month, with the Dow and S&P down 8.8% and 19.8%, respectively. The Nasdaq has fallen 33.8%.
For December, the S&P is down roughly 6.4%, while the Dow and Nasdaq are down 4.2% and 9.7%, respectively. The major averages are on pace for their biggest monthly declines since September.
After a brutal year consumed by inflation and recession fears, investors were hoping to end 2022 on a positive note. Friday began the period for a Santa rally, which is typically considered the last five-day trading stretch of the current year, as well as the first two trading days of the new year.
There have also been questions about whether volatility will continue into 2023 and what the economy and inflation will contribute as the calendar year draws to a close.
The markets were closed on Monday for the Christmas holiday. In this shortened trading week, investors expect relative calm or more volatility due to low trading volumes.