Live stock market news updates: Stocks plunge after interest rates rise, weak retail sales shake markets

US stocks were mixed Monday morning after posting consecutive weekly losses for the first time since late September.

The S&P 500 (^GSPC) fell 0.1%, while the Dow Jones Industrial Average (^DJI) turned positive shortly after the open, jumping 100 points, or 0.3%. The technology-heavy Nasdaq Composite (^IXIC) fell 0.5%. In the past week, the S&P 500 is down 2.1%, the Dow is down 1.7%, and the Nasdaq is down 2.7%.

Elsewhere in the market, US Treasury yields rose, while the US Dollar Index declined. Oil rallied, with West Texas Intermediate (WTI) futures up nearly 2% to trade above $75 a barrel.

Tesla (TSLA) share price rose in early trading after CEO Elon Musk posted a poll on Twitter asking if he should step down as head of the social media platform he recently acquired.

Last week, Tesla shares fell 16% – marking their worst week since the start of the COVID pandemic in March 2020 – on concerns about Musk’s management of Twitter and Tesla stock sales.

Monday’s moves followed last week’s rout that came after Federal Reserve officials delivered a half-percentage-point increase in interest rates overnight. Chairman Jerome Powell has also confirmed that hiking will continue into the new year and the policy will remain restricted for as long as there is a need to rein in still-high inflation – even if it means economic consequences.

“Reducing inflation is likely to require a sustained period of below-trend growth and some easing of labor market conditions,” Powell said during a speech on Wednesday. “The historical record warns strongly against a policy of premature easing. We will continue the course, until the job is done.”

The US central bank’s messages about continued tight monetary policy have dampened hopes of a Santa Claus rebound – a steady rally in the stock market that takes place over the year-end holiday. With its second consecutive weekly decline on Friday, the S&P 500 is now down nearly 6% year-to-date.

“It was a double punch — it was about the Fed and then some weaker economic data — and that created an image of the Fed being ruthless about inflation, maybe not caring about the economy, and not particularly understanding how it works,” said Christina Huber, chief global market strategist at Invesco told Yahoo Finance Live, “The general concern is that we are heading into a recession based on what the Fed has already done, and on top of that, the Fed is poised to do more.”

Traders work on the trading floor of the New York Stock Exchange (NYSE) in New York City, US, December 14, 2022. REUTERS/Andrew Kelly

Before markets close for the long Christmas weekend, investors are heading for an economic bundle and frenzied gains that may offer more hints about the Fed’s policy direction in the new year.

This week’s economic calendar will provide investors with the latest Personal Consumption Expenditure Price Index — or PCE — which is the Fed’s preferred measure of inflation, as well as another reading on gross domestic product, a range of housing data, and the Conference Board’s measure of consumer confidence.

Earnings from Nike (NKE), General Mills (GIS), FedEx (FDX), Micron Technology (MU), and Carnival Cruises (CCL) also stand out.

Alexandra Semenova is a correspondent at Yahoo Finance. Follow her on Twitter @employee

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