The stock market scored an amazing comeback this week, initially selling off on the deteriorating Russia-Ukraine situation, then rallying on optimism that the conflict could have only a minimal impact on the U.S. economy. The S&P 500 closed the week with a 0.8% gain after falling as much as 5.5%, the Nasdaq Composite increased 1.1% after plunging as much as 7%, the Dow Jones nearly broke even after losing 5.3% midweek, and U.S. West Texas crude oil pulled back after briefly topping $100 per barrel.

The large-cap indexes suffered their second consecutive week of declines as worries over a Russian invasion of Ukraine and high inflation weighed on sentiment. A steep decline in Meta Platforms (Facebook) weighed heavily on the communication services sector. The typically defensive consumer staples sector outperformed within the S&P 500 Index, helped by gains in Walmart and Procter & Gamble. 

Stocks had a big fall on Friday as rising fears of a Russian invasion of Ukraine added to a spike in near-term inflation expectations and made investors nervous about short direction of the markets. U.S. National Security Advisor Jake Sullivan warned at a Friday afternoon White House briefing that a Russian invasion could take place during the Olympics, sending oil prices surging and the S&P 500 falling back below its 200-day moving average. The benchmark 10-year yield, which broke above 2% on Thursday for the first time since 2019, fell back to about 1.93% on Friday.

The S&P 500 and Nasdaq Composite had a bad start of the week but they finished higher Friday to conclude their best week so far this year, led by continued strength in quarterly earnings reports and a better than expected January jobs report. Amazon shares surged 13.5% for their biggest one-day gain since 2015, and Snap skyrocketed 58%, suggesting that Meta Platforms' earnings disappointment that sent shares crashing 26% on Thursday was a company-specific issue.

Stocks ended Friday on a high note as strong earnings reports from likes of Microsoft and Apple helped technology stocks rebound from the beating they had suffered so far this year. The S&P 500 added 2.4% on Friday for its best session since June 2020, the Dow Jones climbed up 1.34%, and the Nasdaq Composite surged 3.3% but still remains on track for its worst month since the 2008 financial crisis.

Stocks ended their worst week in nearly two years with another round of intense choppy trading on Friday, sending the S&P 500 tumbling below its 200-day moving average, a level of support that had held up since May 2020. Both the S&P and Dow closed out their third straight week of losses, down 5.7% and 4.6% respectively, while the Nasdaq Composite plunged 2.7% Friday and 7.6% for the week, its worst weekly decline since March 2020. It's the fourth-consecutive week of declines for the Nasdaq, which is moving closer to bear-market territory with every passing trading day.

Stocks wrapped up their second straight losing week to start the year on a mixed note. Indexes were dragged down by uninspiring bank earnings that marked the unofficial start of the earnings season, downbeat economic data, and higher interest rates. Retail sales data released last week badly missed economists' forecast. Spending at physical and online retail and food services businesses in December fell 1.9% from November, while consensus had been for a 0.1% decline.

Stocks ended a rough week, with money flowing out of growth stocks and into value stocks as Treasury yields surged across the board. The Nasdaq 100 Index fell for a fourth straight session Friday, concluding its worst week since February, as investors reconsidered high-flying tech stocks as rates rise. The yield on the benchmark 10-year yield hit 1.8% intraday Friday before ending at 1.77%, jumping 27 basis points for the week. The final catalyst was the December employment report, which showed tight labor market conditions with a slowdown in hiring and strong wage gains.

The bull market that began in March of 2020 has already returned more than 114% in the S&P 500 for index fund investors. After a year like 2021, when the S&P 500 rose more than 27%, investors might be hoping that the trend will continue in 2022. But making predictions about the stock market is always a tricky business, and 2022 is no exception. 
 

Here is what Wall Street strategists are forecasting for 2022:

Wall Street delivered another strong year for investors in 2021, as the reopening of the global economy fueled a resurgence in consumer demand and pumped up corporate profits. As of December 24th,  the S&P 500 had risen 27.7%, its third-straight annual increase. The tech-heavy  “Nasdaq Composite” index is up by 23.27% year to date, and Dow Jones Industrial Average has gained 18.95% during 2021.

The top 3 S&P 500 sectors that gained the most during the year were: