April 1, 2023

According to a recent report by GlobalData, the Standard and Poors 500 (S&P 500) index has lost over $4.4 trillion in the period between January 2022 and January 2023. This marks a significant drop in value for the index, which had seen consecutive years of gains prior to 2022.

S&P 500 falling nearly 20% from its record highs in January

Investors had high hopes for the S&P 500 in 2022 after a strong performance in 2021, during which the index climbed 27%. However, the index suffered a significant drop in January 2022, which put it on the edge of bear market territory. The losses continued over the following months, with the S&P 500 falling nearly 20% from its record highs in January.

Inflation concerns also impacted the performance of the S&P 500, with analysts noting that the index’s median performance on CPI days has been a decline of 0.18% over the past six months. The index failed to rally in April 2022, which is typically a strong month for the S&P 500.

The growth of passive investing was also analyzed as a possible contributor to the index’s decline, with the S&P 500 being the world’s most widely followed index. At the end of 2020, USD 13.5 trillion was indexed or benchmarked to the large-cap U.S. equity gauge.

Looking at current charts, experts suggest that the S&P 500 could fall another 10% to 25%, as it has pulled back from the upper range of an upwards-trending channel pattern that had been in place since 2009.

The overall loss of $4.4 trillion in one year is a significant setback for the S&P 500 and investors who had been relying on its steady gains in the past. As the global economy continues to navigate uncertain times, it remains to be seen how the index will perform in the coming year.

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