Major Financial Market Losses in 2022
The S&P 500 declined approximately 19.4% in 2022, marking its worst annual performance since 2008, while the Nasdaq Composite fell roughly 33.1% due to aggressive interest rate hikes by the Federal Reserve. The benchmark 10-year U.S. Treasury yield rose above 3.88% in October, its highest level since 2007, as reported by the Federal Reserve Bank of St. Louis. Global equity markets lost trillions in value, with the MSCI All Country World Index declining about 18% for the year. For context on market volatility, see the Forbes analysis of the 2022 stock market performance.
Inflation peaked at a 40-year high of 9.1% year-over-year in June 2022, according to the U.S. Bureau of Labor Statistics, driving the Federal Reserve to implement consecutive 75 basis point rate hikes in June and July. The Fed Funds Rate ended the year in the range of 4.25% to 4.50%. The Bloomberg U.S. Aggregate Bond Index, often used as a proxy for fixed income, fell approximately 13% in 2022, its worst year on record. The combination of high inflation and rising rates pressured valuations across growth and value stocks alike.
Notable Company Closures and Restructurings
Several high-profile companies filed for bankruptcy or ceased operations in 2022, including cryptocurrency exchange FTX, which filed for Chapter 11 in November with liabilities exceeding $10 billion. Bed Bath & Beyond, a major U.S. retailer, filed for bankruptcy in April 2023 after years of declining sales that accelerated in 2022. The company's market capitalization fell from over $15 billion in 2021 to near zero by year-end. For a timeline of major corporate failures, see the Forbes list of the biggest bankruptcies of 2022.
In the energy sector, companies faced significant write-downs as oil and gas prices surged following the Russia-Ukraine conflict that began in February 2022. The S&P 500 Energy Sector gained approximately 59% for the year, while renewable energy stocks underperformed. Several SPACs that had merged with companies in 2021 and 2022 saw their targets fail to meet projections, leading to de-SPAC reversions and significant investor losses. The SEC reported a rise in SPAC-related enforcement actions during the year.
Key Regulatory and Economic Policy Changes
The U.S. Securities and Exchange Commission adopted new rules in 2022 requiring public companies to disclose climate-related financial risks and greenhouse gas emissions, with phased implementation beginning for larger filers. The SEC also finalized rules requiring enhanced disclosure of cybersecurity incidents, with a 4-day reporting requirement for material incidents. These rules aimed to standardize previously fragmented voluntary disclosures across industries.
Globally, the European Central Bank raised its deposit facility rate by 250 basis points in 2022, ending the year at 2.00%. The Bank of England increased its base rate to 3.50% by December, its highest since 200