Stocks slide year-end, Tesla snaps seven-day losing streak

U.S. stocks plunged Wednesday as investors struggle to make ends meet in 2022.

The S&P 500 (^GSPC) dropped 1.2% after losses picked up into the close, while the Dow Jones Industrial Average (^DJI) shed 366 points, or 1.1%. The tech-heavy Nasdaq composite (^IXIC) declined 1.4%.

Losses continued across the board Wednesday after equities began the holiday-shortened week — a period that normally sees a seasonal end-of-year rally — on a down beat. In the previous session, the S&P 500 posted a 0.4% loss and the Dow closed just 0.1% above the flatline, while technology stocks dragged the Nasdaq down 1.5%.

Tesla shares (TSLAWednesday’s 3.3% gain was enough to snap a seven day selloff that had brought the stock down almost 70% from its November 2021 peak. These declines were intensified by concerns over CEO Elon Musk’s management of Twitter.

After this week’s events, Tesla’s tailspin continued. Reuters reported Tuesday’s announcement by the electric carmaker that it will decrease output at its Shanghai plant in January added to woes from another report by Reuters Over the weekend, Tesla announced that it would stop production at Shanghai Gigafactory one day earlier than originally planned due to rising COVID-19 levels in China.

Meanwhile, Apple’s (AAPL) stock tumbled 3%, falling below the key technical $130 level Setting a new low of 2022 Wednesday for a second consecutive day while also weighing on wider markets.

“One of the most important items we’ll be watching over the next week or two will be the action in Apple,” Miller Tabak Chief Market Strategist Matt Maley said in a note Wednesday. “The reason that the $130 level is so important is because it’s where the lows from June come in (which was the low for 2022).”

“Therefore, any meaningful break would give the stock a key ‘lower-low’…and that would be quite bearish because Apple has already broken below its trend-line from the March 2020 pandemic lows (and below its 200-day moving average).”

U.S. and global stock markets are set for their worst fall since the 2008 financial crisis. The pessimism surrounding the economy and financial markets, as well as rising interest rates and fears of a recession have put a halt to the seasonal year-end rally stocks experience at December’s end.

The cautiousness of investors in the year ahead was also more important than a China move to relax travel restrictions this January, as China’s second-largest economy reopens after three consecutive years of zero COVID protocols.

“The question is no longer about the speed with which China reopens,” China Beige Book International Managing Director Shehzad Qazi told Yahoo Finance Live on Tuesday. “The real question now is how quickly can Beijing undertake the policies that are necessary for it to gain control of the virus?”

“We haven’t hit the peak of COVID cases — that is still ahead of us — which means that some of the bad news is still ahead of us, and until we are past that point, we can’t really start talking about an economic recovery.”

Oil fell 1.2% in other markets after rising on demand expectations from China’s loosening COVID curbs, and the reopening U.S. oil refineries following this week’s winter storm shutdowns. U.S. Treasury yields rose, with the 10-year note at 3.8%. The U.S. Dollar index rose.

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Yahoo Finance reporter Alexandra Semenova. Follow her Twitter @alexandraandnyc

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