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S&P 500 falls 19.4% in 2022, worst year since 2008 financial crisis

Stocks closed lower across the board on Friday to finish off the worst year for the U.S. stock market since the financial crisis.

When the year's final closing bell rang on Friday, the S&P 500 and Dow were each off about 0.2%, while the tech-heavy Nasdaq fell a more modest 0.1%.

With Friday's losses, the S&P 500 fell 19.4% in 2022, its largest calendar-year decline since a 38% drop in 2008. Closing at 3,839.50 on Friday, the S&P 500 now stands at the same level as March 2021.

The Nasdaq Composite dropped 33% and stands at the same level as July 2020.

The Dow, meanwhile, fell a comparably modest 9% in 2022, while the bond market suffered through its worst year in modern history.

The yield on the 10-year Treasury rose from around 1.5% at the beginning of 2022 to settle at 3.88% on Friday. This move triggered a sell-off across fixed income markets and weighed on housing, with the average 30-year fixed mortgage rate finishing 2022 near 6.4%, its highest year-end level since 2001.

Tesla (TSLA) shares rose 1.1% on Friday, a move that followed the stock gaining some 8% on Thursday in a bid to recover sharp losses suffered this year and this month. Tesla shares lost over 65% this year and more than 30% in December.

WTI crude oil gained more than 2.5% on Friday, finishing 2022 at $80.40 per barrel and giving oil its second-straight annual gain. Though after the price of crude oil surged more than 50% in 2021 and then doubled early this year, WTI finished with a more modest 7% for the year.

The modest gain in oil prices, however, belies the strength seen by energy stocks in 2022, with the energy sector (XLE) rising some 57% this year, the only one of the 11 sectors in the S&P 500 to log gains this year.

The Federal Reserve's aggressive rate hike campaign in 2022 weighed particularly heavy on technology stocks. The technology sector (XLK) fell 28% this year, its biggest drop since 2008, while communication services (XLC) — which was added to the S&P 500 in 2018 — logged its biggest drop on record, falling 38% in 2022, the most of any sector in the S&P 500.

In currency markets, the dollar was weaker on Friday but logged its biggest annual gain since 2015 as interest rate increases from the Federal Reserve boosted demand for the greenback.

Crypto markets also endured a challenging 2022, as bitcoin (BTC-USD) is set to finish the year down 65%. The price of bitcoin was little-changed on Friday to trade near $16,500.

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