- US stocks closed lower on Tuesday as investors remained cautious ahead of interest rate hikes.
- Southwest Airlines fell 6% after continuing to cancel flights following the weekend’s severe weather.
- Tesla Motors fell 11.4% after the electric car company said it might reduce manufacturing in China.
The majority of US stocks declined on Tuesday in expectation of additional central bank interest rate hikes, while Southwest Airlines plummeted due to operational difficulties caused by a severe storm.
During most of Tuesday’s first trading session following Monday’s Christmas holiday closure, stocks were under pressure.
Indicative of Federal Reserve interest rates, the yield on 10-year US Treasury notes inched closer to four percent, dampening the mood. The impact was largest on technology stocks, which rely on debt funding more than industrial firms.
The technology-heavy Nasdaq Composite Index fell 1.4% to 10,353.23.
The Dow Jones Industrial Average rose 0.1% to 33,241.56, while the S&P 500 fell 0.4% to 3,822.25 on the day.
Tuesday’s session is part of the so-called “Santa Claus bounce” period, a seven-session stretch over the weeks of Christmas and New Year’s where stocks tend to meander higher despite low trading volumes.
However, markets were negative for the majority of the day.
Southwest Airlines fell 6% as it continued to cancel a considerable number of flights even after the weekend’s severe weather had passed and other airlines resumed normal operations.
The US Department of Transportation stated in a statement that it was “concerned by Southwest’s unacceptable rate of cancellations and delays” and vowed to “”examine whether cancellations were controllable and if Southwest is complying with its customer service plan.”
Elon Musk’s electric car company, Tesla Motors, fell 11.4 percent following news that it might reduce manufacturing in China, adding to demand concerns surrounding the company.
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