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STORY: Wall Street's main indexes closed lower on Wednesday -- with the Nasdaq hitting a 2022 closing low -- as investors grappled with mixed economic data, rising COVID cases in China, and geopolitical tensions heading into 2023.

The Dow shed 1.1%, the S&P lost 1.2% and the Nasdaq dropped more than 1.3%.

December is typically a strong month for stocks, with a so-called Santa Claus rally usually occurring the week between Christmas and New Year's.

Kevin Mahn is President and Chief Investment Officer at Hennion & Walsh Asset Management.

"I often get the question about whether or not a Santa Claus rally is going to materialize in the final week of 2022. And I believe in all likelihood that that rally came earlier this year than it did in years past, most likely due to the fact that the Fed did make that pivot, if you will, by raising by only 50 basis points in December. And we also know back in November that we were going to have a divided government next year. [FLASH] And in all likelihood, that rally that we were maybe perhaps banking on for the end of this year already took place earlier in November and December this year.”

While recent data pointing to easing inflationary pressures bolstered hopes of smaller interest rate hikes by the Federal Reserve, a tight labor market and resilient American economy have spurred worries that rates could stay higher for longer.

Investors have also been assessing China’s move to reopen its COVID-battered economy against the backdrop of a surge in infections, with the U.S. joining several countries in mandating tests for Chinese arrivals.

As for the market’s individual movers, it was another tumultuous day for Southwest Airlines. The company’s shares dropped a day after the airline came under fire from the U.S. government for canceling thousands of flights.

And one day after Tesla’s shares hit their lowest level in more than two years, the stock gained 3.3% on Wednesday in choppy trade. Tesla shares are down nearly 69% for the year.