Stocks drop, ending Wall Street’s worst year since 2008, S&P 500 ends 2022 down nearly 20%.

Stocks tumbled on Friday, ending a brutal 2022 on a whimper as Wall Street ended its worst year since 2008 on a sour note.

The Dow Jones Industrial Average fell 73.55 points, or 0.22%, to 33,147.25. The S&P 500 shed 0.25% to close at 3839.50. The Nasdaq Composite fell 0.11% to 10,466.88.

Friday was the last day of trading in what has been a painful year for stocks. All three major indicators posted their worst year since 2008 and snapped a three-year winning streak. The Dow performed best in 2022, down about 8.8%. The S&P 500 fell 19.4% and more than 20% below its all-time high, while the high-tech Nasdaq fell 33.1%.

Severe inflation and aggressive interest rate hikes by the Federal Reserve undermined growth and tech stocks and weighed on investor sentiment throughout the year. Geopolitical concerns and unstable economic data also kept the markets on edge.

“We had everything from Covid problems in China to the invasion of Ukraine. All of them were very serious. But for investors, that’s what the Fed does,” Art Kashin, director of operations at UBS, told CNBC’s The Exchange.

As the calendar approaches the new year, some investors believe the pain is far from over. They expect the bear market to continue until a recession hits or until the Fed turns around. Some also predict that stocks will make new lows before recovering in the second half of 2023.

“I would like to tell you that it will be like The Wizard of Oz and everything will be in great colors in a moment or two. I think we could have a bumpy first quarter, and depending on the Fed, it could last a little longer,” Kashin said.

Despite yearly losses, the Dow and S&P 500 broke a three-quarters losing streak. However, the high-tech Nasdaq experienced its fourth consecutive negative quarter since 2001 for the first time since 2001. However, all three averages for December are negative.

Communications was the worst sector in the S&P 500 this year, falling more than 40%, followed by consumer discretionary services. Energy was the only sector that grew by almost 60%.