US Stock markets closed the final trading day of the year 2022 with losses as benchmark indexes on Wall Street posted poor performance. On Friday, 30th December 2022, S&P 500 Index closed markets losing 9.78 points (-0.25%). As of 5:10 p.m. EST, the index is standing at 3,839.50.
The index posted a 5.9% loss for the month of December. The Dow dropped 73.55 points, or 0.2%, to close at 33,147.25. The Nasdaq slipped 11.61 points, or 0.1%, to 10,466.48.
According to data from the markets, 2022 was the worst year for stock markets since the economic crisis in 2008. In 2022, the index which tracks the performance of the top 500 public companies in the United States suffered a loss of 19.4 per cent. The index lost nearly 8.2 trillion dollars due to a decrease in the value of stocks.
2022 is the third-time S&P 500 is suffering annual losses since the market crash in 2008 due to the financial crisis. In 2021, due to renewed interest in tech stocks, investors made huge profits from a 27 per cent jump in S&P 500.
NASDAQ Composite which lists numerous tech stocks suffered losses worse than S&P 500 as the index tumbled by more than 33 per cent in past 12 months. The Dow Jones Industrial Average, meanwhile, posted an 8.8% loss for 2022.
As the Federal Reserve of the United States focussed on hiking interest rates in order to bring down high inflation in the economy, investors were forced to rethink their strategy for investing. Tech stocks which were high in demand during 2021 witnessed a large-scale sell-off in 2022 due to fears of higher interest rates and a drop in revenue.
As expected by the investors, nearly all major tech companies suffered a decline in revenue from advertisement, operations, and sales of their products. Tech stocks also suffered losses as investors decided to not risk their fortunes on volatile stocks. . Amazon and Netflix lost roughly 50% of their market value. Tesla and Meta Platforms, the parent company of Facebook, each dropped more than 60%, their biggest-ever annual declines.
At the beginning of 2023, investors will be mainly focussing on future monetary policy plans of the Federal Reserve. Investors are also looking forward to the quarterly results of various public companies. Federal Reserve officials had earlier stated that the central bank will continue increasing key interest rates slowly.
Wall Street performance of stocks will also depend upon how investors react to recent reports of upcoming recession in the United States. If Federal Reserve continues hiking interest rates, economic activity will slow down and push the economy into a recession.