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Reasons Why the US Stock Market Is Volatile in 2022

Video Credit: Wibbitz Top Stories - Duration: 01:31s - Published
Reasons Why the US Stock Market Is Volatile in 2022

Reasons Why the US Stock Market Is Volatile in 2022

Reasons Why the US Stock Market , Is Volatile in 2022.

The first months of 2022 have been exceptionally volatile for the U.S. stock market.

.

From January through April, the S&P 500 fell by 13.3 percent.

Not since 1939 has the stock market benchmark experienced such a dramatic beginning to the year.

With a continued fall equating to nearly 16 percent for the year, .

Analysts are seeing signs of a bear market as the drop approaches the 20 percent mark.

Tech stocks have experienced even steeper declines, with the Nasdaq Composite hovering at a 25 percent loss.

Analysts say part of the reason why the market has been so volatile has to do with the way the Federal Reserve has responded to inflation.

Raising interest rates has had a complex effect on the stock market, causing some stocks to fall and others to rise.

For instance, bonds have become more competitive in the present market, causing tech stocks to lose some luster.

Other factors contributing to the difficult market include the war in Ukraine... ... and massive COVID lockdowns implemented in China, which also affect the country's production.

So what signs are analysts looking for to predict the immediate and long-term health of U.S. financial markets?.

The rate of inflation is one key factor.

The release of the Consumer Price Index on May 11 has provided some hope that the rate of inflation may have stabilized.

Analysts also point to the markets themselves and whether certain levels can be maintained


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