Stocks moved between gains and losses Wednesday as traders weighed the possibility of a recession, and the likelihood of a longer-than-expected hiking cycle from the Federal Reserve.
The S&P 500 traded slightly lower, falling for a fifth straight day. The Dow Jones Industrial Average last traded up 61 points, or 0.18%, while the Nasdaq Composite shed 0.7%
Wall Street is coming off another tough session, with the Dow falling more than 350 points, or 1.03%. The S&P 500 and Nasdaq Composite lost 1.4% and 2%, respectively.
Investors have been losing hope that the Fed will be able to engineer a so-called soft landing that successfully tamps down inflation through higher rates and also avoids a recession. Instead, concerns are swirling around the state of the economy and the likelihood of a downturn in 2023.
“All told, financial indicators point to a recession on the horizon,” wrote Wells Fargo’s Azhar Iqbal in a note to clients Wednesday. “The S&P 500 has peaked ahead of recessions with an average lead time of four months over the past few business cycles. Taken together with the inverted yield curve, markets are clearly braced for a recession in 2023.”
Investors await more economic data this week for clues on what to expect from the Fed.
Stocks are headed for weekly losses, with the Dow down 2.6%. The S&P and Nasdaq are off by 3.5% and 4.5%, respectively.