Explained | Why the US stock market is tumbling in 2022

Explained | Why the US stock market is tumbling in 2022

The US stock market is off to brutal start in 2022.

The S&P 500, which is widely considered to be the main benchmark for US stock market performance, declined 13.3 percent through April, the steepest four-month drop to start any year since 1939.

The index continues to fall in May and was down 16 percent year-to-date as of Tuesday's close, approaching the 20 percent threshold that some investors consider confirmation of a bear market.

For the Nasdaq Composite, which is heavier on technology shares, the decline has been more severe, falling some 25 percent so far this year.

WHAT IS WEIGHING ON STOCKS THIS YEAR?

The S&P 500 started the year having more than doubled from the lows it hit in March 2020, an upswing that went into reverse almost immediately as the calendar flipped to 2022.

The main factor cited by investors and analysts for the market's weakness is the policy change at the Federal Reserve. As the pandemic took hold, the US central bank put in place emergency policies to stabilize the economy that investors say also emboldened buying of stocks and other riskier assets. But the Fed early in 2022 signaled it was pivoting to tighter monetary policy in order to tamp down