The stock market just had its worst year since 2008

The stock market has come to the end of a very, very bad year. When U.S.-based markets closed on Friday, nearly every major index was down, with some seeing their values drop by nearly a third over the course of the year. After more than a decade of riding high, the stock market took a decisive tumble in 2022.

There are plenty of reasons for the plummeting values, including record-high inflation prompting the Federal Reserve to increase interest rates, lingering impacts from the global pandemic, the Russian invasion of Ukraine, and fears of an oncoming recession. Altogether, these factors compounded to make this the worst year for the stock market since the global financial crisis in 2008.

Here’s a look at just how poorly the stock market performed in 2022.

S&P 500

The S&P 500 ended the year nearly 20% lower than it started. One of the most closely watched stock market indices, the S&P 500 tracks 500 of the biggest companies traded in the U.S., including Apple, Microsoft, Amazon, and Berkshire Hathaway. This year was its worst performance since 2008. On the first day of 2022 trading the S&P closed at 4,796.56. The S&P 500 closed the year out at 3,839.50.

Dow Jones Industrial Average

Down only about 9% from where it started the year, the Dow Jones Industrial Average had one of the least-terrible performances of the major indices. Tracking only 30 companies, the Dow offers a narrower view of the health of the stock market than the S&P 500, putting its only somewhat bad performance in context. The Dow started the year at 36,585.06, and closed at 33,147.25.

Nasdaq

The Nasdaq was the biggest loser of 2022, and tech companies are mostly to blame. Tech stocks make up much of the Nasdaq Composite index, which has fallen more than 33% in 2022. With nearly 140,000 layoffs reported at tech companies throughout the year, uncertainty in the once-red-hot tech sector has caused many investors to turn cold. After Elon Musk’s Twitter takeover, Tesla stock ended the year down by about 70%, while Meta’s stock lost 65% of its value as Mark Zuckerberg bet big on the metaverse. After starting 2022 at 15,832.80, the Nasdaq closed the year at 10,466.48.

Crypto’s crash

Though they’re not a conventional measure of the health of the stock market, cryptocurrencies were hit extremely hard this year. Many of the main cryptocurrencies saw their values plummet in 2022, including Bitcoin falling more than 65% and Ethereum falling nearly 70%. The collapse of the cryptocurrency exchange FTX only worsened the instability of the crypto market.

Outlook for 2023

With lingering inflation and supply chain issues, few expect to see the markets rally dramatically anytime soon. But with both the S&P 500 and the Dow seeing modest gains in the fourth quarter of 2022, this very bad year for the stock market may be a single low point rather than the start of a long slide. Some experts are predicting an end to the IPO drought by late 2023.