Global stocks declined on an annual basis for the first time since 2015 after a punishing fourth-quarter sell-off. Rising interest rates and a decidedly unfriendly global trade environment threatened to halt one of the longest-running bull markets in history.
Cyclical stocks posted the year’s biggest losses, underscored by double-digit declines in the financials, industrials and materials sectors. Technology stocks fell sharply in the fourth quarter but lost just 3% overall due to strong gains earlier in the year. Energy companies led the fourth-quarter sell-off on rapidly falling oil prices and worries about the outlook for the world economy. For the year, traditionally defensive sectors fared better. Health care and utilities stocks rose 3% and 2%, respectively.