The U.S. stock markets experienced considerable volatility as
inflation remained a concern for investors. In July 2022, the U.S.
Federal Reserve enacted its second consecutive 75 basis point
interest rate increase, following a similar increase in the
previous month.
These factors, when combined with an inverted yield curve, early
signs of a softening labour market and a second consecutive
quarterly decline in GDP, have exacerbated investors' concerns
of a looming recession.
While the market has gained some ground from the lows of summer,
as of September 1, 2022, the Dow Jones Industrial Average was down
12.9% year-to-date for 2022, the S&P 500 was lower by 16.8% and
the Nasdaq Composite fell by 24.7%. Over the same period, the CBOE
Volatility Index was up over 30.2%.
