On the first significant trading day of 2023, European and Asian markets advanced as investors attempted to look past a bleak prognosis for the global economy, China's largest cholera outbreak, and Europe's persistently high inflation.
But after a promising beginning, Wall Street again gave in to fear. US markets started the day higher, but the gain was fleeting. With a loss of around 13 points, the Dow finished the day basically unaltered. The Nasdaq Composite was down 0.8% and the S&P 500 was down 0.4%. However, the stock market did close considerably above its session lows.
Tesla revealed fourth-quarter global sales that were less than anticipated, sending its stock down 12%. Apple's market cap is already below $2 trillion after a roughly 4% decline. Undoubtedly a significant sum, but $1 trillion less than the valuation at the same time last year.
The Stoxx 600 index of Europe increased 1.2%, falling short of earlier highs but maintaining significant gains made on Monday while Chinese and US markets were closed. France's CAC gained 0.4% while Germany's DAX increased by 0.8%.
The first significant economic report of the year is expected later this week, and US markets are waiting for it. The minutes from the most recent Federal Reserve meeting, a significant report on manufacturing, and fresh information regarding job opportunities are all expected out on Wednesday. December's monthly jobs data will be made public on Friday.
Survey results that showed supply chain and inflation pressures were marginally easing for manufacturers in the economies that use the euro currency were made public on Monday, which encouraged investors in Europe.
According to information made public by the Institute for Economic Research (Ifo) on Tuesday, part shortages in Germany, the continent's largest economy, have also decreased. The nation's inflation rate is still on the decline. According to data released on Tuesday by the German Federal Statistics Office, consumer prices increased by 8.6% in December, compared to 10% in November and 10.4% in October.
In morning trading, the London Stock Exchange's FTSE 100 index saw gains of 2.3% before retreating slightly to end the session 1.4% higher.
Chief economist at Berenberg Bank Holger Schmieding expressed cautious optimism for the coming year.
"The coming year could be substantially less unstable than 2022 unless a significant fresh geopolitical shock intervenes. The outlook is steadily improving, particularly for Europe, he wrote in a message on Tuesday.
In Asia, markets recovered from early losses to close the day in positive territory.