Recession, inflation, and earnings are some of the factors that will drive U.S. stocks in 2023

NEW YORK—U.S. Stock investors are eager to end 2022, which was dominated by brutal Federal Reserve rate increases designed to dampen the steepest of the market. inflation In 40 Years.

S&P 500 has fallen nearly 20% year-to-date, with just a few trading day left in 2022. This is the largest calendar-year drop since 2008. The Nasdaq Composite has suffered even worse, having fallen by almost 34 percent in the first quarter of the year.

The shares of Amazon.com Inc. have fallen by around 50% this year. Tesla Inc. shares are down about 70%, and Meta Platforms Inc. shares have dropped approximately 65 percent. Energy is still a hot topic. stocks They have posted eye-popping profits, bucking the trend.

Inflation, and the Fed’s degree of aggressiveness in trying to contain it, will likely remain a critical factor driving equity performance as 2023 gets under way. Investors will be monitoring for the effects of higher interest rates on other assets and stocks, as well as how they affect the economy.

Here’s a look at the major themes that will be driving the U.S. stock exchange in 2023.

Recession? Soft Landing?

One of the most important questions that will influence stocks in the new Year is whether the economy is headed towards a rebound. recessionAs many investors expect, it will be.

Stocks could fall if there is a recession next year. Historical data shows that a bear market has never bottomed prior to a recession.

According to Truist Advisory Services, stocks are often hard hit by recessions. Since World War Two, the S&P 500 has fallen an average 29 percent in recessions. However, these declines are often accompanied by significant gains.

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