Global stocks fell sharply as rising inflation, higher interest rates and the war in Ukraine combined to push the U.S., Europe and Japan into bear market territory. Slowing global economic growth and fears of a potential recession further weighed on markets, accelerating a broad selloff that commenced shortly after the start of the year.
Bond markets tumbled around the world as the Federal Reserve, the Bank of England and many other central banks moved to tighten monetary policy. With inflation rising to levels not seen since the 1980s, the Fed increased its key policy rate by 50 basis points in May, then 75 basis points in June — the largest single rate hike by the U.S. central bank since 1994.
All sectors of the MSCI ACWI (All Country World Index) declined, underscored by steep losses among information technology and consumer discretionary stocks. Many leaders of the prior bull market — including Apple, Amazon and Microsoft — were among the largest detractors in the index. Energy and consumer staples stocks held up relatively better, though both sectors fell during the quarter.
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