This year, the stock market has experienced high volatility due to various macroeconomic and geopolitical concerns. The Dow Jones Industrial Average (DJIA) has declined 10.5% year-to-date, while the Nasdaq Composite (COMP) fell 22.2%. The benchmark S&P 500 index also declined 14.6% year-to-date.
With inflation hitting a multi-decade high, the Fed’s aggressive interest rate hikes to bring the prices down and the consequent possibility of a recession have amplified the market volatility. According to the Bureau of Economic Analysis report, the U.S. economy declined for the second consecutive quarter, with the Gross Domestic Product declining at an annualized rate of 0.9%. Therefore, many analysts believe that the economy has already entered a recession.
