(Bloomberg) — U.S. stocks fell on the final trading day of 2022 as financial markets cap off the worst year in more than a decade for global stocks and bonds.
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The S&P 500 fell, taking the shine off Thursday’s rally, its best day of the month, and is down nearly 20% in 2022. The tech-heavy Nasdaq 100 was poised to lose a third of its value on Friday. Tech stocks have emerged as the most vulnerable to rising rates this year.
Treasuries fell, sending yields higher across the board. The dollar fell against major peers as the Bloomberg Dollar Spot Index hit its lowest level since June. The yen also rallied after the Bank of Japan released an unprecedented third day of unplanned bond purchases.
Stocks lost and yields climbed to session highs after a report showed Chicago business activity rose more than expected in December, suggesting a stronger economy could withstand more rate hikes.
This week’s losses dashed hopes of a rally to close out 2022 — a year in which inflation reasserted itself to wipe a fifth from global stocks, the worst run since the financial crisis. Bonds lost 16%, the biggest decline for a leading measure since at least 1990, as central banks around the world raised interest rates to try to slow consumer prices.
“We have never seen a market environment where both stocks and bonds fell at the same time,” said B. said Art Hogan, chief market strategist at Relay Wealth. “The good news is that we’ll soon put this year in the rearview mirror. The bad news is that 2023 could be a bumpy ride for the first few months. Weak economic trends will keep the Fed fighting inflation through 2023, but a mild recession could help set stocks in the second half of the year.”
Concerns about the spread of Covid-19 are still lingering in the markets. The European Commission has asked EU member states to review Covid testing and sequencing procedures and consider scaling them back amid heightened concerns about the virus spreading from China.
Elsewhere, emerging-market shares settled for the first weekly advance of three, although the benchmark index remains on track for a more than 20% decline in 2022.
Oil fell, adding to a three-day slide on worries about rising crude stockpiles and concerns that rising Covid-19 infections in China could dampen demand from one of the world’s top oil importers. Bitcoin closes out the year, slipping 0.8% to bring its decline in 2022 to more than 64%.
Some key movements in the markets:
The S&P 500 was down 0.9% as of 10:10 a.m. New York time.
The Nasdaq 100 fell 1.3%
The Dow Jones industrial average fell 0.8%
The Stoxx Europe 600 fell 0.9%
The MSCI world index fell 0.6%
The Bloomberg Dollar Spot Index fell 0.2%
The euro rose 0.2% to $1.0679
The British pound was little changed at $1.2064
The Japanese yen rose 0.8% to 131.90 per dollar
Bitcoin fell 1% to $16,420.39
Ether fell 0.6% to $1,187.8
The yield on 10-year Treasuries rose eight basis points to 3.89%.
Germany’s 10-year yield rose 10 basis points to 2.54%
Britain’s 10-year yield rose one basis point to 3.67%
This story was produced with the help of Bloomberg Automation.
–With assistance from John-Patrick Barnert, Richard Henderson, Wildana Hajrik, and Robert Brandt.
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