As investors considered the possible effects of this week’s Federal Reserve meeting, a flood of earnings from leading tech companies, and the jobs data on Friday, stocks ended the day lower on Monday.
The S&P 500 and Nasdaq Composite indices fell by 1.3% and 2%, respectively, as a result of the Dow Jones Industrial Average’s today’s more than 260 point decline. Despite this, the market has enjoyed a solid start to 2018, with the Dow and many of 2017’s underperformers topping Wall Street thus far in January.
With a growth of almost 10% thus far in 2023, the communications industry is the best-performing market group. This is a significant improvement over 2022, when it had the worst performance, falling 40%.
Several media outlets, both new and old, have also had a comeback this month. With a $47.5 billion market capitalization, CBS owner Paramount has reached a record high. Disney (DIS) has gained around 25%. More than 20% has been added to Netflix (NFLX). (So much for streaming media dying?) Shares of Meta Platforms, the company that owns Facebook and Instagram, are also up more than 20%.
Stocks in consumer discretionary companies have also recovered since falling last year. With a loss of roughly 38%, the industry had the second-worst performance in 2022.
Such a turnaround! About 35% have been added to Tesla (TSLA). The electric vehicle industry titan founded by Elon Musk had a terrible 2022, losing over two-thirds of its value. But in the new year, it has made a surprising recovery, increasing in value as investors bet on its future.
Investors are betting on the Fed’s continued restraint in the magnitude of rate increases. This follows many historically significant gains from the previous year. Even some investors believe that the Fed may stall this year. They predict that the economy may have a “soft landing,” or a slowdown rather than a full-fledged recession.