Dow rises 100 points in choppy trading session as investors mull recession risks

Stocks wavered Monday after the major averages posted their second straight week of losses for the first time since September as investors weighed recession fears.

The Dow Jones Industrial Average rose 101 points, or 0.31%, boosted by gains in 3M, Walgreens Boots Alliance and Travelers, which all rose more than 1.5%. The S&P 500 and the Nasdaq Composite shed 0.02% and 0.51%, respectively.

The moves followed another down week for stocks after the Federal Reserve delivered a 50 basis point short-term interest rate hike and signaled higher-for-longer rates. Recession fears mounted as the central bank upped its forecast for future hikes above previous expectations, saying that it now expects to hike rates to 5.1%.

“As we near the end of December, investors are still waiting on that Santa Claus Rally, with stocks coming off back-to-back down weeks for the first time since September,” said Chris Larkin, managing director of trading at E*Trade from Morgan Stanley. “Data showing inflation cooling may have given the market a short-lived boost, but the Fed standing firm with Powell driving home the point that rates could remain elevated for quite a while likely grounded some investors.”

Stocks are set to round out a dismal monthly performance in December. On Friday, the Dow fell 281.76 points, or 0.85%. The 30-stock index shed 1.66% for the week, bringing its monthly losses to 4.83%. The S&P 500 dropped 1.11% and tumbled 2.08% for the week, upping its monthly declines to 5.58%. The Nasdaq Composite slumped 0.97% on Friday and 2.72% for the week. It’s down 6.65% this month.

Investors will also be watching for a few earnings reports due later in the week. FedEx and Nike are both scheduled to report earnings results on Tuesday after market close. As recession fears mount, earnings results will become more of a focus.

“Rates and inflation may have peaked but we see that as a warning sign for profitability, a reality we believe is still underappreciated but can no longer be ignored,” wrote Michael Wilson, equity strategist at Morgan Stanley, in a Monday note.