War, inflation, rates. US stocks recorded the worst quarter in two years

The first three months of this year, during which the main indices in the United States recorded the worst performance in the last two years, ended unsatisfactorily for equity investors, according to the daily. The Wall Street Journal. The domestic stock exchange in Prague was no exception.

Inflation in the United States has climbed to its highest level in 40 years, Russia’s invasion of Ukraine has shaken already strained supply chains, and the US Federal Reserve (Fed) has begun raising interest rates. All this had a negative impact on the performance of US stocks.

The US Fed has unleashed a wave of uncertainty among investors with its plan to raise rates. With these steps, the US Federal Reserve erased the historic wave of stimulus measures that have pushed stocks to record in the last two years.

All three major stock indices in the United States thus weakened in the first quarter. The Dow Jones index, which includes shares of 30 major US companies, depreciated 4.6 percent. The broader S&P 500 fell 4.9 percent, breaking a series of seven profitable quarters. The Nasdaq Composite Index, which includes many high-tech companies, fell as much as 9.1 percent, according to Reuters data.

However, the losses could have been even higher had it not been for the upward turnaround that started in mid-March. At the beginning of March, all three mentioned indices depreciated over ten percent, while the technological Nasdaq even lost 20 percent. At the same time, the S&P 500 index outperformed the Nasdaq technology by 4.2 percentage points last quarter, the biggest difference since 2006.

While the sharp decline at the beginning of this year put the Nasdaq index in a bear market, which is defined by a 20 percent decline from its peak, the recovery in recent weeks has reduced its losses by about half. The Dow Jones and S&P 500 indices are currently about six percent below their highs.

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Development of indices in the USA

Meta, which operates the social network Facebook, recorded a large drop in individual stocks. It has had its worst quarter since 2012, when its shares began to be publicly traded. Within the S&P 500 index, it was one of the biggest losers in the first quarter, when its shares weakened by almost 34 percent.

Other well-known companies also faced high declines. Netflix streaming service lost 38 percent in its first three months, its worst quarterly performance since 2012. PayPal then lost about 39 percent, its worst quarter in history.

On the contrary, the best sector in the history of the S&P 500 index, which grew by 38 percent. Shares of some energy companies have risen up to several tens of percent.

The Prague Stock Exchange is also in the red

The Prague Stock Exchange also finished the first quarter in the red. Its PX index weakened by 4.12 percent, while in February it reached the highest values ​​in the last 13 years. But the military conflict in Ukraine has thwarted the positive developments.

Shares from the financial sector in particular weakened significantly on the Prague Stock Exchange. For example, the shares of the Austrian bank Erste have fallen by almost 20 percent since the beginning of this year.

On the other hand, the armaments company Česká zbrojovka was successful, benefiting from the situation when it is likely that it will receive new orders for the armament of the armed forces. Its shares rose almost 21 percent in the first three months.

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