US Stocks Experience Worst First-Half Decline in Over 50 Years

The US stock market has seen its worst half-year since 1970. This is due to growing concerns about how inflation will impact economic growth. The benchmark S&P 500 index has fallen 20.6% in the past six months. Other major US indexes have also suffered sharp drops.

Stocks across Asia, Europe, and the UK have also experienced steep losses. This is because central banks all over the globe are trying to control rising living costs. Prices of essential goods such as food and fuel have jumped. As interest rates rise, some economists predict that the US, the largest economy in the world, will enter a recession this year.

"If the US Federal Reserve continues hiking rates the stock market will react quite negatively," Dan Wang of Hang Seng Bank China, chief economist, said to the BBC.

Shane Oliver, AMP Capital stated that "Shares are likely to see continued short-term volatility as central banks continue to tighten to combat high inflation, the war in Ukraine continues and fears of recession remain high."

The Dow Jones Industrial Average, another major US stock index, dropped by over 15% in the first quarter of the year. This is the largest drop since 1962. The technology-oriented Nasdaq Composite saw a drop of almost 30%. This was its largest percentage decline in the first half a year.

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