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Inflation and Recession Dominated 2022 Stock Markets

U.S. stock investors are looking forward to the news year of 2023, a brutal year dominated by market-punishing Federal Reserve rate hikes designed to tamp down the steepest inflation in 40 years.

The S&P 500 is down nearly 20% year-to-date with only a few trading days left in 2022, on pace for its biggest calendar-year drop since 2008. The carnage has been even more severe for the Nasdaq Composite, which had tumbled by nearly 34% so far for the year.

Inflation, and the Fed's measurements to contain it, will likely remain a critical factor driving better performance as 2023 gets under way. Still,investors will also be looking for outcomes of higher interest rates. Here is a look at some of the big themes for the U.S. stock market in 2023.

Investors expect that if a recession starts next year, stocks could be set for another slide.


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