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7 Key Events That Influenced U.S. Stock Market Volatility In 2022

Will 2023 be better?

This article was contributed to us by Dr Clemen Chiang, Co-Founder and CEO of Spiking.

It seems like there is one problem after another for the U.S financial markets right now. The stock market remains volatile enough, with crashes and delistings throughout the year. But, other major influences from the industry, government, and international relations made things even more challenging. Here are 7 key events that have impacted the markets so far this year. And remember, there’s still a month to go!

#1 Inflation: America Sees Rises And Falls Across 2022

Let’s start with the ongoing issue of inflation. Statistics from Statista show this rise in the inflation rate was already underway more than a year ago. But, a rate of 5.4% in September 2021 compared with 8.2% in 2022 is quite a jump. Thankfully, rates are dropping again. The peak came in June at 9.1%. We can’t expect this dip to go on forever, but at least we’re over the worst of it.

#2 Invasion: Ukraine Is Invaded By Russia In February

There are few better words than volatile to sum up the Ukrainian conflict over 2022. This was certainly the experience with the stock market. Back in March, Time reported on investors bailing on stocks, sending the S&P 500 index crashing by 8%. There were ongoing concerns over Russian stocks. Meanwhile, gas and food prices began to soar, as did gold. As the conflict rages on, gambles on stocks and the value of Russian investments remain risky.

#3 Isolation: China Delists Companies From The New York Stock Exchange

This was a major moment in financial relations between China and America in 2022. There are concerns over the isolation China imposes upon itself through the massive split from U.S. exchanges. The nation is unwilling to comply with U.S. regulations regarding company audits. As a result, five of the largest state-owned companies left U.S. exchanges in August. With a deadline of 2024 for full delisting, this is one to keep an eye on.

#4 ICBM: Korea Launches Missile In October And Shocks The World

The war in Ukraine is not the only military-themed event shaking up the financial world in 2022. The United States must watch North Korea following a recent weapons test. The ICBM Korea launched flew toward Japan, to the condemnation of many nations. We have to remember that the stock market slid considerably after similar tests in 2017. So, we can expect further volatility if this situation continues.

Read Also: Investing In US Indexes? Here Are U.S. Focused ETFs That You Can Invest On The SGX: SPDR S&P 500 US$; SPDR DJIA ETF  

#5 Inverted Yield: The Curve Raises Red Flags In October

The U.S. Yield Curve is an important indicator for the health of interest rates, and experts watch for an inversion, where short rates rise above longer rates. This inversion has become more pronounced through 2022. As reported by Forbes, the 3-month rate rose above the 10-year rate for the first time since the pandemic. The fear here is an incoming recession.

#6 Interest Rates: Yet Another Increase Is Applied In November

Next, we have to talk about another ongoing story. The issue of interest rates in America has been a major talking point for months. But, the Federal Reserve announced its fourth consecutive 0.75-point rate increase on November 2nd. As reported by CNBC, this would mean the most extreme form of policy tightening for about 40 years. While we are seeing forecasts for an adjustment to a lower 0.5-point rate increase in December, we can’t say there is any guarantee.

#7 Implosion: Crypto Meltdown Adds To Stock Market Volatility

Finally, we have the ongoing issue with cryptocurrency. The decline of this currency has been an interesting ride to watch from afar in 2022. Bitcoin has been down 75% over the past year. However, on the day of writing this, we saw an implosion crypto investors have dreaded. It fell to its lowest point in two years. This comes just a week after the major collapse of FTX and a failed bailout by Binance. The industry is in bad shape, and the stock markets can’t help but rise and fall alongside it.

Are You Still Investing?

You might think this all sounds like a disaster from the viewpoint of an investor. But, volatility isn’t necessarily a negative. You can’t have valleys without peaks. There will be opportunities to take advantage of these twists and turns. If you can stay informed, build a good strategy with expert help, and be a little fearless, you can succeed. 2023 may not be any smoother, but it can still be profitable.

About the author

Dr. Clemen Chiang is the Co-Founder and CEO of Spiking, an AI and data-powered insights and education platform that reveals how top funds, like Temasek, and investors, like Warren Buffet, are trading stocks. Established in 2016, Spiking has received the gold award for Best Innovative Start-up from Singapore Infocomm Technology Federation (SiTF) and is supported by the National Research Foundation, Prime Minister’s Office, Singapore under the Interactive & Digital Media Strategic Research Programme. Clemen launched Spiking with the mission of democratizing data to help people build generational wealth.