Dec. 31, 2021Dec. 30, 2022

See just how bad a year it was for your retirement account — and why

It was a tough year to make money in the stock market. The S&P 500 peaked on the first trading day of 2022 and never came close to revisiting its high point.

The widely used market gauge had its worst year since the 2008 financial crisis. One thing explained stocks’ struggles: After years of easy money, the Federal Reserve began raising interest rates in March to combat inflation and never stopped. Keep scrolling to see how the year unfolded.

In the first half of 2022, the S&P 500 fell by 21 percentIt was the worst six-month start to a year since 1970.

Price jumps from the startThe government’s first inflation report of the year — showing prices in December rose 7 percent annually — shaved 8 percent off stocks in two weeks. Later inflation reports continued to show higher prices, spooking investors across the year.

War in EuropeAftershocks from Russia’s Feb. 24 invasion of Ukraine rattled global markets for food, fuel and fertilizer, putting further upward pressure on prices. Markets had their biggest drop in over a year on March 7, as oil prices spiked.

LiftoffIn March the Fed responded to rising prices by lifting interest rates. It would do so three times in the first half of 2022. On June 15 rates rose by the largest amount since 1994. Markets briefly rebounded after concern earlier in the week the Fed wouldn’t do enough to combat inflation.

A sour springCostly inventory buildups and shifting consumer tastes caused back-to-back earnings flops from Target and Walmart in mid-May, spiking recession fears.

The S&P 500 is up 1 percent since JulyA summer bounce back faltered this fall, and the market finished up the second half of the year not far off from where it began.

Strong earnings and hope of a smooth landingStrong earnings reports from companies like Apple and Alphabet in late July gave investors confidence companies could weather rising rates and a recession.

Help very much wantedHiring was strong all year. In early August it was reported that unemployment had reached its pre-pandemic low the prior month. But investors worried a tight labor market might mean wage gains that fuel inflation.

Prices up again and stocks downStocks fell sharply on Aug. 26 after Federal Reserve Chair Jerome H. Powell indicated rates would remain high. And a disappointing inflation report Sept. 13 sent the S&P down 4 percent, the worst day of the year.

A reliefTwo months later, the inflation fever finally broke with the release of October’s consumer prices report. On Nov. 10, the S&P 500 jumped more than 5.5 percent, its biggest one-day gain since April 2020.

Rising interestMarkets rose with the July increase, as Powell indicated he did not believe the United States was in a recession. But every other increase has rattled markets, as investors feared ever-higher borrowing costs. By Dec. 14 rates were at their highest level since 2007.

Overall, the S&P 500 fell by 19 percent this yearIt is one of the 10 worst performing years for the stock index in at least 90 years.

The S&P 500 is up 2 percent since 2021In 2021, the market grew by nearly 27 percent — and nearly all those gains were erased this year.

The S&P 500 is up 19 percent since 2020If you want to feel better about your investments, you’ll need to go back to the start of 2020. Stocks have rebounded considerably from the brutal bear market at the start of the pandemic.

Looking ahead, Wall Street analysts say stocks won’t gain ground until the Fed stops raising rates. With policymakers promising at least two more rate increases in 2023, the next bull market is unlikely to start any time soon. While inflation is also bad for bonds, higher interest rates are making some safer investments, such as money market mutual funds and short-term Treasury securities, a better bet.

Editing by Jennifer Liberto, Kate Rabinowitz and Karly Domb Sadof.