On December 22, the United States witnessed a significant downturn in its stock market, with all three major indices closing in the redThe Nasdaq composite index experienced a dramatic fall, losing more than 2% in valueThis downward trend can be attributed to the release of robust economic data from the third quarter, which has exacerbated concerns about the Federal Reserve's commitment to an aggressive tightening policyAnalysts are predicting that the pressure on US stocks is likely to persist in the near future.

As the market closed, the Dow Jones Industrial Average fell by 1.05%, the Nasdaq dropped by 2.18%, and the S&P 500 index declined by 1.45%. The technology sector was severely affected, with major players like Nvidia and AMD experiencing declines of more than 7% and 5%, respectivelyTesla, another notable tech giant, plunged nearly 9%. Aviation stocks also struggled, with Boeing seeing a dip of close to 4%.

This downturn extended to popular Chinese stocks listed in the U.S., as indicated by the Nasdaq Golden Dragon China Index, which fell by 1.05%. Companies like Xpeng Motors saw their stocks drop by over 4%, while NIO and Tencent Music experienced declines of more than 2%. On a slightly more positive note, some companies like iQIYI and Bilibili reported increases of over 4% and 1%, respectively.

The United States Department of Commerce released data indicating that the annual growth rate for the economy in the third quarter was 3.2%, surpassing prior expectations of 2.9%. Additionally, initial claims for unemployment benefits suggested that the labor market remains tight

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Consumer spending, which constitutes approximately 70% of the economy, registered an annualized growth of 2.3%, significantly revised upward by 0.6 percentage pointsHowever, spending on goods was adjusted downward, reflecting a decline of 0.4%, marking the third consecutive quarter of drop.

The figures also revealed that non-residential fixed investment, a critical measure of corporate spending, grew by 6.2%, a revision upward of 1.1 percentage pointsMeanwhile, net exports contributed 2.86 percentage points to economic growth, although this figure was slightly revised downwards by 0.07 percentage pointsOn the flip side, private inventory investment held back growth by 1.19 percentage points, again showing a downward adjustment from previous data.

Rather paradoxically, the stronger-than-expected economic data has intensified worries within the marketMany fear that these numbers will compel the Federal Reserve to sustain its tightening policy to combat inflation

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The Fed's hawkish stance has been a significant factor contributing to the turbulence in the stock market throughout the yearChief strategist at Interactive Brokers highlighted that the Fed has indicated multiple times its desire to raise interest rates to a level that adequately addresses inflation, even if it risks endangering jobs and economic output, which could lead to a recession.

CFRA Research's chief investment strategist expressed concerns that the market is apprehensive of a slow cooling of the economy, which may force the Federal Reserve to maintain its hawkish position for an extended periodNorthwestern Mutual’s senior portfolio manager pointed out that persistent inflation, poor economic conditions, and a tight job market should prompt investors to reassess the overly optimistic earnings expectations for 2023, predicting continued interest rate hikes from the Fed.

In a surprising turn, Elon Musk, CEO of Tesla, addressed the stock's recent drastic decline of nearly 9%, which at one point exceeded 11%. In an optimistic announcement later that evening, Musk declared that he would not sell any more Tesla stocks before 2025. Following Musk's statement, Tesla shares saw a rebound in after-hours trading, jumping by 3%. This showcases the influence that Musk holds over the Tesla stock as well as investor sentiment.

Meanwhile, legal battles took center stage as Sam Bankman-Fried (often referred to as SBF), the founder of the collapsed cryptocurrency exchange FTX, was granted bail by a New York judge

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This bail was set at a staggering $250 million, or around 1.7 billion yuanDuring the waiting period for his trial, SBF will have to adhere to a myriad of restrictionsThis court appearance marked SBF's first time in New York federal court after his extradition from the Bahamas.

The judge confirmed that SBF’s next court appearance is scheduled for January 3, 2023, and he is expected to be released from custody shortly thereafterThe bail agreement includes several stipulations; besides the hefty pretrial bail amount, SBF will be required to wear an electronic monitoring device, undergo mental health counseling, and restrict his movement to the northern region of California.

SBF faces serious allegations tied to the catastrophic failure of FTX, including fraud that affected investors to the tune of billions of dollarsIt has been alleged that he misappropriated customer funds for purchasing properties, making political donations, and funding risky trades through his hedge fund, Alameda Research

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Following an earlier hearing, SBF appealed to the Bahamian court for an immediate transfer to the U.Sto confront allegations and to seek compensation for affected customersThe situation further escalated when U.Sofficials transported him via flight to New York that same night, indicating that two of his closest associates had already pleaded guilty to several criminal charges and were cooperating with prosecutors.

In a shocking revelation, the U.Sattorney for the Southern District of New York, Damian Williams, announced that former Alameda Research CEO Caroline Ellison and former FTX CTO Gary Wang pleaded guilty to criminal wrongdoingEllison's plea agreement includes seven charges, among them telecommunications fraud and conspiracy to commit securities fraudWang, on the other hand, admitted to four counts of telecommunications fraudThe implications of these guilty pleas raise the stakes for other former FTX executives, as prosecutors now possess potential incriminating evidence that could be useful in future trials.