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Rabat – Despite a rebound on Friday, stock markets have lost a record $7 trillion in value since the start of the year, with tech stocks being hit hard.
For most people rising food and energy prices and the conflict in Ukraine have dominated the attention. Yet amid ongoing geopolitical crises, US stock markets have experienced a meltdown in 2022 that has surpassed the amount of value lost compared to the past decades’ recession-bringing market crashes.
The 2022 market downturn has now lost more value than any crash before, according to experts. During the Wall Street crash following the Dot-Com bubble, markets lost $4.6 trillion, while the real estate-induced 2007-2008 financial crisis saw markets lose $2.3 trillion in value. The selloff during the height of COVID-19 chaos saw $4.4 trillion in value evaporate.
Yet 2022’s market collapse has exceeded even these large crises which precipitated recessions. Despite a rally on Friday, investors have made heavy losses, especially in recent days.
Some have gone as far as describing the current downturn as a “second dot-com bubble.”
Tech stocks, long the darlings of Wall Street speculators, took a particularly hard hit this week, as the tech-focused NASDAQ has fallen by more than 25% this year. The Nasdaq has fallen by this amount only 11 times in history, with nine of those drops being “associated with recessions,” according to Bespoke Investment Group (BIG).
The NASDAQ is down 25.54% over the past six months despite a rally on Friday.
The plunge in value appears to have put billionaire Elon Musk’s purchase of Twitter in doubt, and many experts expect uncertainty and volatility to continue.
Markets rebounded on Friday, with the Dow Jones rising 1.5%, the S&P 500 gaining 2.4% and Nasdaq recovering by 3.8%. Yet despite the one-day rebound, the Nasdaq is facing its longest weekly losing streak since 2001, according to Bespoke Investment Group.
