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Monday, Jan 05, 2026

S&P 500 sees 5th straight decline as recession fears weigh on US stocks

S&P 500 sees 5th straight decline as recession fears weigh on US stocks

The Nasdaq Composite notched a fourth straight loss as major banks sound the alarm on recession worries.

US stocks largely finished in the red Wednesday, ending a topsy-turvy session amid worries that the US and economies worldwide are sliding into recession. 

The S&P 500 notched its fifth consecutive losing session with eight of its 11 sectors moving lower, led by the communications services group. The Nasdaq Composite marked a fourth straight loss, while the Dow industrials ended flat. Among individual stocks, Carvana sank on rising bankruptcy concerns. 

Wall Street banks and CEOs including JPMorgan boss Jamie Dimon in recent days have told investors to prepare for sharp stock losses next year and for recessions to sweep across major economies. Growth worries were exacerbated Wednesday by weak Chinese trade figures even as Beijing continued to roll back its zero-COVID policy measures related to quarantines and testing. 

Here's where US indexes stood at the 4:00 p.m. closing bell on Wednesday: 

*  S&P 500: 3,933.92, down 0.19%

*  Dow Jones Industrial Average: 33,597.92, 0.00% (1.58 points)

*  Nasdaq Composite: 10,958.55, down 0.51%

"Our baseline view is a weakening economy, diminished consumer activity and corporate profit challenges while inflationary pressures promote higher interest rates than recent experience," Tom Hainlin, global investment strategist at US Bank Wealth Management, wrote in emailed comments. "Next week's updated Summary of Economic Projections (SEP) will provide an important overlay of Fed vs. market-based inflation and interest rate expectations." 

Here's what else is happening today:


*  Binance's CEO called FTX's Sam Bankman-Fried "one of the greatest fraudsters in history."

*  A growing pile of hidden debts could shock markets, warned the Bank for International Settlements.

*  Goldman Sachs boss David Solomon sees just a 35% chance the Fed avoids a recession.

*  DoubleLine Capital CEO Jeff Gundlach called the Federal Reserve's plan to raise interest rates further questionable because policy makers will likely end up reversing those hikes sooner rather than later. 

*  An ongoing drop in response rates for popular economic surveys could call into question the reliability of forecasts made by the Federal Reserve, said Fundstrat's Tom Lee.

In commodities, bonds, and crypto:


* West Texas Intermediate crude fell 2.9% to $72.30 per barrel. Brent crude, the international benchmark, rose 0.2% to $77.35.  

*  Gold gained 1% to $1,800 per ounce. 

*  The 10-year Treasury yield fell 18 basis points to 3.42%.

*  Bitcoin fell 1% to $16,833.04.

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