The S&P 500 dropped significantly on Friday as the relief rally in technology from the previous day fizzled out. Equities marked their worst annual loss since the 2008 financial crisis.
The Nasdaq Composite was down 1%, the Dow Jones Industrial Average was down 0.9% or 296 points, and the S&P 500 was down 1%. Stocks had a rough start to the last trading day as tech selling resumed after taking a break the previous day.
Falling by more than 1% were Apple, Alphabet, Meta Platforms, and Microsoft Corporation Stocks of semiconductor companies fell further as investors worried about dwindling chip demand in the context of a weaker global economy.
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The Federal Reserve clearly made a mark on the 30% annual decline in the technology sector. The US central bank started raising interest rates at the quickest rate in four decades, which increased treasury yields and decreased the market values of more expensive industries like technology.
US dollar was unable to stir the market significantly
The EUR/USD gained a little on the final trading day of 2022 and closes 0.13% above its beginning price. The EUR/USD pair remains in its usual ranges in the lead-up to the week, month, quarter, and year-end due to a light economic calendar. The EUR/USD exchange rate is 1.0695 at this moment.
The US Dollar Index, which gauges how much the dollar is worth in relation to a basket of currencies, declines 0.33% to 103.634. The yield on a US 10-year treasury note is climbing five basis points, to 3.869%, despite the US dollar’s decline.
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In addition, Spain’s inflation rate decreased for the sixth consecutive month, to 5.6% YoY, below November’s figure of 6.7%. The EUR/USD 1.0600-1.07 trading range was not broken, nonetheless, as a result of the lack of liquidity in the market and the approaching year 2023.
Oil ends the year with another green finish
After Russia’s invasion of Ukraine disrupted global fuel shipments, crude prices soared in March. The international benchmark Brent reached $139.13 per barrel, the highest price since 2008. The second half of 2022 saw a sharp decline in prices as central banks raised interest rates and stoked fears of generalized recessions.
Both oil crudes closed the year with great gains, erasing the last trading week’s decline. Brent crude ended up 3% at $86 per barell. US West Texas Intermediate was able to pull back above the $80 mark closing 2.6% higher at $80.46
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After increasing by 50% in 2021, Brent was on track to gain 10% for the year. After rising by 55% the previous year, US WTI crude was on track to increase by around 6% in 2022.
It is another red year for gold
Aggressive interest rate increases from the Federal Reserve fueled a dollar surge that questioned the precious metal’s status as a secure location to store assets. Gold was on track to decline for the second consecutive year in 2022. However, the day ended up 0.5%.
When the Ukraine crisis first started last year, bullion was extremely close to reaching the record highs above $2,000. This price was last seen in 2020 as nations all across the world went into lockdown.
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