Now that January 2022 is coming to a close worried economists and traders look to the rough numbers put up by U.S. stocks and wall street over the course of the month. The Nasdaq, a tech heavy market had it's worst start to a year since 2009, during the last recession, which lasted from 2007 - 2009. If not for a late month gain in performance the Nasdaq would have surpassed its worst January performance. The S&P 500 is tracking index that tracks the stock performance of the 500 largest companies in the U.S. had it's worst overall month since the start of the COVID-19 pandemic in March 2020. The poor performance of these markets can be contributed to a couple of factors. A new variant of COVID-19 broke out across the world in January impacting global business. The FED also announced in January that interest rates would be increased more aggressively than markets initially thought. The U.S. threatening economic sanctions on Russia, over geo-political issues. And wages are rising around the U.S. could decrease revenues of companies.
Theses factors led to the slowing of trading in the S&P 500, and the Nasdaq. It was also noted that tech companies in the Nasdaq have come under scrutiny as investors have accused many tech companies of trading at lofty valuations. Which impacted the Nasdaq more than the S&P 500. Hopefully the markets can recover in the month of February, as trading can resume at normal levels. But I suspect most traders are waiting on the specifics on the FEDs interest rate hikes before resuming normal levels of trading, which will most likely come in March.
https://www.reuters.com/business/nasdaq-futures-edge-higher-end-turbulent-month-2022-01-31/
Interest rates play a huge role in financial markets, uncertainty around the rates or even an increase is bound to have negative consequences on the market as the FED looks to temper inflation.
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