The S&P 500 index edged down 0.1% in the final week of 2022, a year that saw the market benchmark lose more than 19% amid rising inflation and interest rates.
This put the index down 5.9% for December, the last month of a tumultuous year in which the S&P 500 recorded its largest yearly loss since 2008. The index fell in seven of the 12 months of 2022.
Last week’s slight move came in just four sessions on light trading volume. The market was closed on Monday in observance of Christmas Day and many traders remained on a holiday break on the days the market was open.
The year’s decline came amid rising inflation that prompted the Federal Reserve’s Federal Open Market Committee to boost its benchmark lending rate several times, sparking worries that the rising rates may lead to a recession. Investors have been hoping the rate increases would slow, yet at its final meeting of the year earlier last month, the FOMC raised its median rate outlook. Investors are thus looking at 2023 with some trepidation.
Every sector except energy fell this year. Communication services suffered the largest percentage loss in 2022, tumbling 40%, followed by a 38% slide in consumer discretionary and a 29% drop in technology. Energy, meanwhile, jumped 59%.
For the week, every sector except financials and energy declined. Materials had the largest percentage drop, down 1.2%, followed by a 0.9% decline in consumer staples and drops of 0.6% each in utilities and real estate. On the upside, financials rose 0.7% and energy edged up 0.6%.
The US stock market was closed on Monday in observance of New Year’s Day. On Tuesday and Wednesday, investors will receive some manufacturing and construction data, but much of the market’s attention will likely be on the expected release Wednesday afternoon of minutes from the latest FOMC meeting, while looking ahead to December employment data coming Thursday and Friday. ADP will release its private sector December employment data on Thursday while the US government’s December nonfarm payrolls and unemployment rate are expected on Friday.
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