Stocks close lower in choppy trading session

Andy Kapyrin, RegentAtlantic Co-CIO, and Rhea Thomas, Wilmington Trust Senior Economist, join Yahoo Finance Live to discuss the market outlook after stocks close lower at the end of today's trading session.

Video transcript

- Welcome back to Yahoo Finance Live. Let's bring in our market panel now to take us through today's trading action and where we may be heading. Andy Kapyrin is RegentAtlantic Co-Chief Investment officer. And Rhea Thomas is Wilmington Trust Senior Economist. And just want to note as well that we are awaiting the start of President Joe Biden's press conference marking his first year in office. We'll be taking that live once it starts.

But before we head to our panel, we want to get one last check of the market action before the closing bell. As we can see here, we are accelerating to the downside on the three major stock indexes. The NASDAQ composite is the laggard once again seeing those tech shares coming under renewed pressure, down about 1.2%, as we speak, with about a minute or just under a minute to go until the closing bell. The Dow Jones Industrial average down more than 300 points or about 1%. And the S&P 500 down about 0.9 percentage points heading into the close. And here's the closing bell.

- OK, we have a closing bell. We have a gavel and put that in the history books. What's past is past. We're going to look to the future, but we got to see where we're going to settle. The Dow is going to be off almost 1% accelerating, as Emily said, in the last few minutes of the trading session down 339 points. S&P 500 is going to settle down 1%. It's off about 44 points. NASDAQ down a little bit more than 1%, losing 166 points.

Let's get to the panel because we are awaiting President Biden. But let me start with you. Rhea, the thing that, I think, catches a lot of us by surprise is the speed with which-- and I realize it's a year to date and we're only three weeks into January. But the speed with which we have sold off, for instance, the S&P 500. As we look at this, are we overreacting?

RHEA THOMAS: Well, we're not actually surprised by the volatility in markets this year. You do have a Fed that is expected to raise rates. And not just raise rates, but also start running off its balance sheet. And during periods when the Fed is withdrawing accommodation, there is some expected volatility.

We do think that the Fed will be able to remove this accommodation, though, while still keeping the economic recovery on track. We do expect the Fed to raise rates by 2 to 3 hikes this year rather than a full 4 that the market seems to be pricing now. So we do think that the Fed will have a bit more of a moderate withdrawal of accommodation than the market's currently pricing. And we think that that will allow the economic recovery to continue in our view.