Dow drops 500 points to end worst quarter for stocks in 2 years

For the first quarter, the Dow and S&P 500 closed down 4.6% and 4.9%, respectively. The Nasdaq lost 9%. For the three major averages, this was worst period since the first quarter of 2020, which marked the start of the Covid pandemic in the U.S. and saw the S&P 500 tumble 20%. The start of a rate hiking cycle from the Federal Reserve, high inflation and Russia's invasion of Ukraine all contributed to the struggles for equities this quarter.

March was a bit of a bright spot, however, as the major averages enjoyed a solid two week rally in the back half of the month. The S&P 500 and Nasdaq rose more than 3% in March, while the Dow added 2.2%.

"There's been a nice relief rally, partly on beginning to look past the invasion, some clarity around central bank actions, and some technical buying, as there was a lot of money on the sidelines," said Erik Knutzen, the chief investment officer for multi-asset class strategies at Neuberger Berman.

"But we think from here investors are going to, at some point, realize, wait a second, growth is slowing and interest rates are rising and inflation is still high. This is still a challenging set-up for equities."

Keywaylock
26/12/2022
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