Wall St. reports largest annual drop since 2008

• Financial

Amid conflicting narratives on what the US Fed has been mulling for an inflation-embattled US economy, the Wall Street ended 2022 with the steepest annual decline since 2008 on Friday with tech-heavy Nasdaq shedding more than a third of its entire market cap.

In the final working day of the year, US stocks closed lower, winding down a year of staggering losses stemming from the US Fed’s hawkish rate-hike policy. In the matter of the fact, the US Federal Reserve had raised its benchmark borrowing cost this year by the fastest pace in more than 40 years, while the US Central Bank’s overnight lending rate stood at a range between 4.25 per cent and a 4.50 per cent by end-2022.

However, it is anticipated that the US Fed would highly likely to step up its borrowing cost above a prior estimate of 75-bps next year, eventually adding to holocaust on growth stocks. Apart from that, according to data released on Friday’s market wind-down, all three key indices of Wall Street had logged their first annual decline since 2018 as growth stocks took a hefty whiplash following the US Fed’s aggressive rate-hike cycle.

Nevertheless, the US Fed has forecasted earlier this year that it would continue to hold on to a hawkish monetary policy at least until 2025 in order to lassoing down the country’s inflation below its target range of 2.0 per cent by then, while the US Fed also had warned that it would continue to execute its policy tightening even in the expense of a recession.

Wall St. witnesses largest annual drop since 2008

On top of that, since the Wall St. had reported its worst annual percentage decline since 2008, the era of great financial depression, a number of issues appeared to have played a pivotal role in the latest downward spiral in key indices of Wall St.

including a lacerating inflation-surge, frets of an impending recession, concerns over China demand alongside a geo-political turmoil which could turn the tide of global economic order. Citing statistics, trade-sensitive Dow dwindled 8.9 per cent over the year and Wall St.

bellwether S&P 500 shrugged off 19.4 per cent, while tech-heavy Nasdaq was nudged as much as 33.1 per cent.