NEW YORK, July 1 (Reuters): Steep losses in stocks and bonds, dizzying market swings and a Federal Reserve intent on curbing the worst inflation in more than forty years have been among the hallmarks of US markets in the first half of 2022.
The S&P 500 finished the initial six months of 2022 with a 20.6 per cent loss, shedding some $8.5 trillion in market value as the index logged its steepest first-half decline since 1970.
The index earlier this month confirmed the common definition of a bear market by closing down over 20 per cent from its January record peak.
Bonds have fared little better, with the ICE BofA Treasury Index down about 10 per cent this year, on pace for its worst year in the index's history going back to 1997.
For now, investors see little respite from the gyrations that have pummeled markets over the last several months amid worries that the Fed's fight against inflation will further dry up risk appetite while potentially throwing the US economy into recession.
The coming month will bring a fresh round of corporate earnings, the latest inflation data and culminate in a Fed meeting, leaving plenty of opportunities for markets to build on a nascent rally in stocks that began in mid-June or seek out fresh lows.
Soaring inflation forced the Fed to quickly raise rates in the first half of the year, throwing into reverse the easy monetary policy that helped the S&P 500 more than double from its March 2020 lows.
The index's slide has pummeled many of the high-growth shares that prospered in recent years.
One high profile casualty has been Cathie Wood's ARK Innovation ETF, which holds post-pandemic favorites such as Zoom Video Communications, Teladoc Health Inc and Roku Inc, is down about 58 per cent year-to-date.
The tumble in equities has also severely tested the popular strategy of buying stocks on weakness, which rewarded investors for the better part of the last decade but has floundered this year amid the S&P's decline.
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