Traders work on the floor Dec. 29 at the New York Stock Exchange in New York.
Stocks gave up an early gain and ended lower Tuesday, a lackluster first trading day of 2023 for Wall Street just days after it closed the books on its worst year since 2008.
The S&P 500 shed a 1% gain and finished 0.4% lower. The Dow Jones Industrial Average slipped less than 0.1% and the Nasdaq composite dropped 0.8%. Small-company stocks also lost ground, pulling the Russell 2000 index 0.6% lower.
Technology stocks were among the biggest weights on the market. Apple fell 3.7%, leaving its market value below $2 trillion for the first time since March 8, 2021. Shares in the iPhone maker fell nearly 27% in 2022, their first annual decline in four years amid a broad slide in technology sector stocks.
All told, the S&P 500 fell 15.36 points to 3,824.14. The Dow slipped 10.88 points to 33,136.37. The Nasdaq slid 79.50 points to 10,386.98. The Russell 2000 fell 10.51 points to 1,750.73.
Markets in Europe and Asia gained ground.
Long-term bond yields fell significantly. The yield on the 10-year Treasury, which influences mortgage rates, fell to 3.77% Tuesday from 3.88% late Friday. Stock and bond markets were closed Monday for the observed New Year's Day holiday.
Investors opened a new year with the same concerns that weighed on markets in 2022, leading the benchmark S&P 500 to plunge nearly 20% for the year, just its third annual decline since the financial crisis 14 years ago.
Inflation is easing but remains stubbornly hot, which has prompted the Federal Reserve to keep raising interest rates to slow economic growth. The Fed will release minutes from its December policy meeting on Wednesday, potentially giving investors more insight. The central bank's next policy decision on interest rates is set for Feb. 1.
The Fed's key lending rate stands at a range of 4.25% to 4.5% after rocketing from a range of 0% to 0.25% at the beginning of 2022. The U.S. central bank forecasts that it will reach a range of 5% to 5.25% by the end of 2023 and it currently doesn't call for a rate cut before 2024.
Investors are looking ahead this week to several updates on the employment market. The government will release a report Wednesday on job openings for November, followed by a weekly report on unemployment on Thursday. The monthly report on employment for December will be released Friday.
Wall Street also is waiting on the latest round of corporate earnings reports, which will start flowing heavily around the middle of January. Analysts polled by FactSet expect earnings for companies in the S&P 500 to broadly slip during the fourth quarter and remain flat for the first half of 2023.
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