In the entire first half of the year, stock market indices recorded the biggest decline in more than 50 years.

On Wall Street on Thursday, stock prices fell, so the stock indices ended in the red on both a monthly and quarterly basis, while in the entire first half of the year they recorded the biggest decline in more than 50 years.

The Dow Jones weakened yesterday by 253 points or 0.82 percent, to 30,775 points, while the S&P 500 slipped 0.88 percent, to 3,785 points, and the Nasdaq index 1.33 percent, to 11,028 points.

Thus, the month of June ended in a gloomy mood. All three indices recorded a decline throughout the second quarter as well, and two consecutive quarters of decline in the S&P 500 and Dow indices have not been seen since 2015.

In the entire first half of the year, meanwhile, the Dow Jones plunged more than 15 percent, the S&P 500 more than 20, and the Nasdaq index almost 30 percent.

For the S&P 500 index, this is the worst first half since 1970, for the Dow Jones since 1962, and for the Nasdaq the worst since it has existed.

In the first days of this year, the indices were reaching record levels, as they did last year, thanks to the recovery of the economy from the coronavirus crisis, but the market direction soon reversed due to the spread of the omicron variant of covid-19.

This was followed by the Russian invasion of Ukraine, which disrupted the energy, raw materials and food markets and thus further fueled the rise of already high inflation.

As inflation in the U.S. reached its highest levels in 40 years, the Fed responded with aggressive interest rate hikes, and many other central banks around the world did or announced the same.

Because of this, of course, global economic growth will slow, and a recession is also possible.

In the first quarter, the U.S. economy fell on a quarterly basis, and macroeconomic data in the second quarter are not brilliant either.

“Since the beginning of the year, inflation has been rising, while economic growth is slowing. The Fed is tightening financial conditions to curb inflation and panic in the markets. But I think a ‘soft’ landing for the economy is unlikely. It seems to me that we have actually already sunk into a recession, and the only question is how deep it will be,” says Paul Kim, director at Simplify.

Data published yesterday pointed to a slight decline in disposable income in the U.S., weakening consumption, still high inflation, and a slight rise in unemployment.

“The data are beginning to show that consumption is slowing, it seems that inflation is beginning to affect the average consumer. And that can affect company earnings, the main drivers of the market,” says Oliver Pursche, vice president at Wealthspire Advisors.

Stock prices also fell yesterday on European exchanges. London's FTSE index weakened 1.96 percent, to 7,169 points, while Frankfurt's DAX slipped 1.69 percent, to 12,783 points, and Paris's CAC 1.80 percent, to 5,922 points.

Source: jutarnji.hr