Stocks ended the day lower on Monday as investors weighed the potential implications of this week’s Federal Reserve meeting, a deluge of earnings from top tech firms and the jobs report on Friday.
The Dow Jones Industrial Average plummeted more than 260 points today, a move that dragged the S&P 500 and Nasdaq Composite indexes down by 1.3% and 2%, respectively. Nevertheless, the market has still had a strong start to 2018, with the Dow and many of last year’s laggards leading the way on Wall Street so far this January.
The communications sector is the best performing market group so far in 2023, surging nearly 10%. This is a big turnaround from 2022 when it was the worst performing sector, plummeting 40%.
Several other media companies, old and new, have also enjoyed a resurgence this month. CBS owner Paramount has soared to an all-time high, with a market capitalization of $47.5 billion. Disney (DIS) is up about 25%. Netflix (NFLX) has gained more than 20%. (So much for the death of streaming media?) Shares of Facebook and Instagram owner Meta Platforms are up more than 20%, as well.
Consumer discretionary stocks have also rebounded after tumbling last year. The sector was the second-worst performer in 2022 with a loss of about 38%.
What a comeback! Tesla (TSLA) is up more than 35%. Elon Musk’s electric vehicle giant had a miserable 2022, losing nearly two-thirds of its value last year. But it’s made a stunning comeback in the new year, surging in value as investors bet on its future.
Investors are buying into the hope that the Fed will continue to pull back on the size of its rate hikes. This comes after several historically large increases last year. Some investors are even thinking that the Fed could pause later this year. They believe that the economy could wind up heading for a so-called soft landing: a slowdown but not a full-blown recession.