Stocks close out worst 1st half since 1970
Wall Street racked up more losses for stocks Thursday, as the market closed out its worst quarter since the onset of the pandemic in early 2020.
The S&P 500 fell 0.9%, its fourth consecutive drop. The benchmark index is now down 21% since it hit an all-time high at the beginning of the year. It entered a bear market earlier in June.
All told, the S&P 500’s performance in the first half of 2022 was the worst since the first six months of 1970.
“And in 1970 there was a solid rebound after that first half decline,” said Lindsey Bell, chief markets and money strategist at Ally Invest. “This time around, the impact of the Fed, the impact of inflation and the uncertainty of where growth goes from here is really weighing on investors’ minds. ... We just don’t know when the clouds of uncertainty are going to start to clear.”
The market’s steep decline this year has all but wiped out its gains from 2021, what was a banner year for the market as it emerged from its previous bear market in early 2020.
Rising inflation has been behind much of the slump for the broader market this year as businesses raise prices on everything from food to clothing and consumers are squeezed tighter. Inflation remains stubbornly hot, according to a series of recent economic updates.
The Federal Reserve and other central banks have been aggressively raising interest rates to try and slow economic growth in order to cool inflation.
“What the market is trying to assess is when does it seem as if the Fed is going to have what it needs to ascertain that inflation is plateauing,” said Quincy Krosby, chief equity strategist for LPL Financial.