U.S. stock indices today started the first trading session of the new year in a positive mood, but the trend quickly turned negative. Last year was the worst for the U.S. stock market since 2008 with the S&P 500 losing 19.4%; the Dow Jones Industrial Average 8.8%, and the Nasdaq Composite hi-tech index plummeting 33.1%. U.S. stock market indices remain highly uncertain, which could cause increased volatility soon.

U.S. stock market indices-what’s going on?

“The calendar year may change, but the themes remain the same,” notes Richard Hunter of Interactive Investor, quoted by MarketWatch. – Fears of a recession, bolstered by high inflation and rising interest rates, will be back on the agenda.”

Earlier, International Monetary Fund (IMF) Managing Director Kristalina Georgieva said the recession could affect a third of the world economy in 2023.

This year will be tougher on the world economy than the one we left behind, she warned. “Why? Because the three major economies — the U.S., the European Union and China — are slowing down at the same time,” the IMF chief told CBS. — We expect one-third of the world’s economy to be in recession.”

The rise in the U.S. dollar, a common reaction to fears of a global economic slowdown, will have a negative impact on the earnings of U.S. companies that operate in other countries as well.

Yet Evercore ISI analyst Julian Emanuel says such fears don’t necessarily mean the stock market won’t be able to rise. “There is a long history of periods of simultaneously falling earnings and rising stock prices,” he said.

The U.S. manufacturing purchasing managers’ index (PMI) declined to 46.2 points in December from 47.7 points a month earlier, according to final data from S&P Global, which calculates the index. This is the lowest level since May 2020.

The Dow Jones Industrial Average fell 0.15 percent to 33101.76 points. The Standard & Poor’s 500 was down 0.05% to 3,837.01 points at the time. The Nasdaq Composite Index was down 0.2% at 10,445.71 points since the market opened.

Earlier, we reported that the South Korean stock index is falling.