The major market indexes started the year on a somber note as they witnessed severe volatility due to surging inflation and the potential for aggressive interest rate hikes. Later, the commencement of the Russia-Ukraine war added to the downside. Although rising crude oil prices and supply disruptions have dampened investor sentiment, the markets seem to have absorbed most of the negatives. Furthermore, with peace talks between Ukraine and Russia progressing, the worst may be over for the markets. Since March 14, 2022, the Dow Jones Industrial Average has jumped 4.6%, while the S&P 500 and Nasdaq Composite have gained 6.4% and 8.8%, respectively.
Experts believe that the economy will continue its steady recovery this year driven by improved corporate earnings. This bodes well for growth stocks. Evercore ISI’s head of equities, derivatives and quantitative strategy, Julian Emanuel, said “I think the Fed has set the stage for investors to focus on earnings again. Bottom-line earnings estimates since the beginning of the year have risen.” Also, investors' interest in growth stocks is evident in the SPDR Portfolio S&P 500 Growth ETF's (SPYG) 16.3% returns over the past year.
