Stock indices are falling — what's happening on Wall Street

On Thursday, January 2, major US stock indices closed in the red after volatile trading. Investors started the new year facing conflicting signals, from stable labor market data to a stronger dollar and a drop in Tesla shares.

This is reported by Reuters.

What's happening on the stock market

Despite the fact that the main US indices ended the session with a decline, they avoided the worst performance of the day, although they had previously shown short-term growth.

"We received some macroeconomic news, although it is somewhat contradictory. And today we see a very strong dollar. We're going to have some challenges over the next few weeks, including the release of employment data next Friday and the start of fourth quarter reporting," said Peter Cardillo, chief economist at Spartan Capital Securities in New York.

Cardillo also added that in the short term, the market will remain volatile until these events clarify the situation.

Tesla shares fell by 6.1% after reporting the first annual decline in deliveries. The incentives offered by the company failed to curb the decline in demand for its outdated line of electric vehicles.

A report from the US Department of Labor showed that the number of initial and renewed applications for unemployment benefits decreased last week. This increases the likelihood that the Federal Reserve may leave the key interest rate unchanged at its next meeting.

Despite uncertainty about the speed of the Fed's rate cuts, the Donald Trump administration's policy initiatives, and geopolitical tensions, the market focused on the strength of the US economy.

Wall Street indices ended 2024 with double-digit growth. The S&P 500 recorded its best two-year period since 1997-1998, boosted by the first Fed rate cuts in three and a half years, the artificial intelligence boom, and expectations of the new Trump administration's pro-business policies.

The upswing lost momentum in the final weeks of 2024, when the S&P 500 and Dow both posted declines in December as markets assessed the likelihood of fewer Fed rate cuts this year.

In particular, the major indices changed as follows:

• The Dow Jones Industrial Average fell 151.95 points (0.36%) to 42,392.27.
• The S&P 500 fell by 13.08 points (0.22%) to 5,868.55.
• The Nasdaq Composite lost 30.00 points (0.16%) to 19,280.79.

Among the 11 main sectors of the S&P 500, consumer goods suffered the most, in particular due to the fall in Tesla shares. At the same time, the energy sector showed the largest growth due to higher oil prices.

Apple shares fell by 2.6% as the company offered rare discounts in China to compete with local manufacturers.

Crypto stocks such as Coinbase, MicroStrategy, and MARA Holdings rose by 2.6-3.6% due to the rise in bitcoin prices.

On the New York Stock Exchange, the ratio of growth to decline was 1.14 to 1. On the Nasdaq, the ratio was 1.2 to 1. Trading volume on US exchanges amounted to 15.01 billion shares, slightly higher than the average of 14.92 billion over the past 20 trading days.

As a reminder, in early 2025, the best assets to invest in are already being identified. In particular, experts recommend considering currency and gold.

We also wrote that the stocks of South Korean companies have plummeted. The second season of the popular TV series "Squid Game" caused this sharp drop, as the main actor is the largest shareholder.