The worst financial opening to a calendar year in decades concluded Thursday.
Everything from U.S. stocks to emerging markets, bonds and cryptocurrencies closed the first six months of 2022 down, the Wall Street Journal reported. These declines are largely due to investor fears about the aggressive interest rate increases that the Federal Reserve is using to fight accelerating inflation, reported Yahoo Finance.
“That’s the biggest risk right now—inflation and the Fed,” Katie Nixon, chief investment officer for Northern Trust Wealth Management, told The WSJ.
Since the start of 2022, the Dow Jones Industrial Average is down more than 15%, the S&P 500 more than 20% and the Nasdaq almost 30%, reported CNBC. Investment grade bonds lost 11% in H1 2022, according to The WSJ, and cryptocurrency lost 60% of its market cap in the same stretch, reported Technext.
While financial markets do not directly proxy the overall health of the economy or measure the job market, these losses have taken a toll on both everyday Americans’ savings and hedge funds’ profits, The WSJ reported.
Commodities are the only assets that ended the period higher than they started, with oil surging to more than $108 a barrel and gas costing more than $5 per gallon in much of the country. This anomaly is due to Russia’s invasion of Ukraine decreasing global oil supply, according to The WSJ.
When the S&P 500 has fallen by 15% or more during the first six months of the year, notably in 1932, 1939, 1940, 1962 and 1970, it has rebounded by rising an average of 24% in the second half, according to The WSJ.
Nixon could not be reached for comment by The Daily Caller News Foundation.