The start of 2022 has its impact on the US stock market, where Investors have deserted trade which has generated huge profits since the financial crisis. This new change has favored the game of staid business against fast-growing technological companies, which Wall Street largely ignored in recent times.
The tech company Nasdaq Composite has seen a drop of around 4.5 per cent in the first week of 2022. This is the worst start of the new year since the Slowdown In China made its impact globally on financial markets in 2016.
This tech tumble and disturbance because of the United States bonds yielded a surge in the past 28 months. The concerns are that the Federal Reserve will increase the rates more aggressively than before to counter this hot inflation.
Tech stocks have made a huge recovery in the past years, especially the fast-growing and loss-making companies whose price increase is predicted as the bumper for future earnings. These companies are most susceptible to the new changes in the stock market.
As Fed policy has moved to the fore. The fear of the omicron variant has receded. Moreover, before the start of 2021, the major yet central bank announced the removal of crisis-era- policies and an increase in rate cycles in the new year.
The situation points to a bumpy road ahead, with rises and falls in rates colliding with attendant threats of coronavirus to the economy.
