Dow Jones Industrial Average (DJIA)The S&P 500 (SPX)And this Nasdaq Composite (COMP) They posted their first annual decline since 2018, driven by interest rate hikes by the US Federal Reserve.
In 2022, the Dow Jones fell -8.8%, the S&P 500 lost -19.4%, and the Nasdaq fell -33.1%, and it’s important to note that the annual percentage declines for all three indexes were the largest since the 2008 financial crisis. .
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The US Federal Reserve raised the benchmark interest rate by 50 basis points in December 2022, and the federal funds rate is now in the range of 4.25% to 4.5%, the highest level since 2007.
Despite this, inflammation That’s more than the Fed thinks will be consistent with stable prices, and the U.S. Fed has more work to do. Scott Wren, senior global market strategist for Wells Fargo Investments, said:
The truth is, as we work our way closer to mid-2023, we believe we will experience some market turbulence before the skies begin to clear. and months of the following year.
Investors continue to worry that an aggressive Federal Reserve will push the economy into a deeper recession, which will drag down corporate earnings and stock markets.
The outlook for risk appetite is not good in the near term, and going forward US stock market Highly sensitive to any kind of FED comments.
The S&P 500 is down -19.4% in 2022
The S&P 500 ( SPX ) lost -19.4% in 2022 to close at 3,839 points. In the chart below, we can also see that the price has yet to stabilize above the 10-day moving average, which could be a sign that we may see further declines in the coming weeks.
The current support is at 3,600 points, and if the price falls below this level, it will be a “sell” signal, and there is an open path to 3,500 points.
The possibility of a reversal is still limited, but if the price rises above 3,900 points, the next target could be the standing resistance at 4,000 points.
DJIA is down -8.8% in 2022
The Dow Jones Industrial Average (DJIA) weakened by -8.8% in 2022 to end the year at 33,147 points.
The current support level is 32,000 points and if the price falls below this level, the next target could be 31,000 points. If the price rises above 33,500 points, the next target could be resistance at 34,000 points.
The Nasdaq Composite is down -33.1% in 2022
The Nasdaq Composite (COMP) lost -33.1% in 2022 to end the year at 10,466 points. The prospect of more aggressive monetary policy is keeping investors in a negative mood, and the potential for upside for the Nasdaq composite remains low.
In the chart above, we can see that the price has moved back below the 10-day moving average, which indicates that we may see further declines in the coming days.
An important support level for the Nasdaq Composite is at 10,000 points, and if the price falls below this level, the next target could be 9,500 points or lower.
The Dow Jones, S&P 500 and Nasdaq posted their first annual decline in 2018, driven by interest rate hikes by the US Federal Reserve. There is a high probability of another interest rate hike when Fed policymakers meet in February, and investors continue to worry that a tighter Federal Reserve could push the economy into a deeper recession.