Given the Federal Reserve has raised interest rates seven times this year to fight inflation, the broader market has declined.
As of December 14, the S&P 500 has declined 16.7% year to date, the Dow Jones Industrial Average has fallen 7.16%, and the Nasdaq Composite or simply Nasdaq, has retreated 29.44% in 2022.
Of the three major indexes, the Nasdaq has decreased the most because it includes many growth stocks whose valuations have been negatively affected by the rising interest rates. Furthermore, the Nasdaq gives more weight to some big tech companies whose valuations have declined substantially this year as capital has moved from the tech sector into Treasuries given the higher yields.