Markets Slide Lower as Recession Fears Loom


Joseph Rangel

Dec 16th 2022  .  2 min read

The stock market continued to slide on Friday, with the S&P 500 futures falling overnight. This followed the Federal Reserve’s announcement earlier in the week that it was considering raising interest rates, which led to a shift in market sentiment and increased selling. Throughout the night, the indices traded sideways, but as the opening bell approached, the critical level of 3,900 was broken and held below, indicating sellers were in control of the market.

Critical levels of support broken

When the market opened, buyers attempted to push the market above the psychological level of 3,900, but this effort was quickly suppressed, showing that sellers were still in control. The selling continued for several hours, causing the S&P 500 futures to drop by 50 points.

The market finally found some support at the psychological level of 3,850, but remained reluctant to move higher or lower. This period of consolidation at a critical level was likely a pause before the market geared up for its next move.

During the final hour of trading, there was enough buying pressure to push the market higher, though this was likely due to a lack of selling after a long week rather than strong buying.

Economic data reporting next week

Next week is relatively light on the economic data front, with the release of Continuing and Initial Jobless Claims numbers on Thursday and the Personal Consumption Expenditures price index on Friday. Both of these reports could impact the market, with the latter being closely watched by the Federal Reserve as it considers future rate hike decisions. It will be important for traders to pay attention to these reports in order to get insight into what may be coming in the future.

Markets close into weakness

The market ended the week in the red, with the S&P 500, Nasdaq, and Dow Jones all closing lower on Friday. The S&P 500 futures closed down 1.42%, losing 55 points, while the Nasdaq futures closed down 1.23%, a decrease of 141 points. The Dow Jones futures followed, closing down 1.12%, losing 372 points.

Looking for a way to identify the best performing stocks in any market condition? Raghee Horner has decades of insight on spotting relative strength in indexes and individual assets. For more information, checkout Sector Secrets!