Pain, few gains for investors as markets slumped in 2022

Investors found few, if any, places to safely put their money in 2022, as central banks in the U.S. and around the globe raised interest rates for the first time in years to fight surging inflation, stoking fear of a global recession.

Uncertainty about how far the Federal Reserve and other central banks would go in the fight against inflation sparked a return of volatility. Large swings in stocks were common on Wall Street as the Fed raised its key interest rate seven times and signaled more hikes to come in 2023.

Russia’s invasion of Ukraine and China's strict COVID-19 policies also contributed to inflation and roiled the global economy as well as markets in Asia, Europe and the U.S.

On Wall Street, the benchmark S&P 500 index had its worst start to a year since 1970. By June, t he index fell into a bear market, a drop of more than 20% from the record high set in early January. The energy sector was the lone winner, benefitting from a spike in oil and gas prices. Technology stocks tumbled after leading the market during the pandemic.

Borrowing money got more expensive. The 10-year Treasury yield, which influences rates on mortgages and other loans, soared, reaching 4.22% in October after starting the year at 1.51%.

Still, climbing yields in the U.S. and abroad sent prices for older bonds already in investors’ portfolios sharply lower. The rout in bonds was particularly painful for fixed-income investors.

Cryptocurrency investors weren’t spared either. Bitcoin shed more than half its value and a number of high-flying companies wound up in bankruptcy court.

— Alex Veiga

Here’s a look back on the key events in markets for 2022:

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INFLATION AND THE FED

Inflation was the dominant global economic theme this year. Gasoline prices in the U.S. reached $5 a gallon....