The stock market closed out the final day of June with losses, capping off a tumultuous month for investors and the S&P 500 index’s worst first half since 1970.
The Dow Jones Industrial Average closed with a loss of 0.8 percent Thursday after falling 254 points. The Dow ended June down 7.2 percent on the month and 15.3 percent since the start of 2022.
The Nasdaq closed with a loss of 1.3 percent Thursday, bringing its total monthly decline to 7.7 percent and its plunge since the start of the year to 29.5 percent.
The S&P ended June with a loss of 0.9 percent, falling 8.9 percent on the month and 21 percent from an all-time record reached on Jan. 2. The S&P fell more over the past six months than any first half of a year since 1970, but did not begin that decline from an all-time high as it did this year.
Stocks had fallen steadily since the start of 2022 after almost 18 consecutive months of rapid gains. Stock values exploded shortly after the market crashed amid the outbreak of the pandemic, as the federal government pumped trillions of dollars in fiscal and monetary stimulus through the economy.
A decline in spending on in-person services during the pandemic also fueled new retail interest in stock trading and cryptocurrencies, which led to another massive rally last year as COVID-19 vaccines unlocked a rapid economic rebound.
While stocks were expected to come back to earth in 2022, Wall Street has taken relentless and escalating losses as high inflation, the war in Ukraine and the Federal Reserve’s efforts to mitigate both boost concerns about a recession.
The Fed aims to ramp up rates gradually and give the economy enough time to adjust to higher borrowing costs. Higher interest rates from the Fed are meant to slow the economy enough to reduce inflation without halting growth or forcing layoffs. Higher interest rates also make investments in riskier assets and startups less attractive, which brings down the value of stock prices.