Market volatility remained elevated during the third quarter of 2022. After experiencing the largest first half decline since 1970, the S&P 500 started Q3 on a strong note by climbing nearly 14% during the first six weeks of the quarter. This rally created a lot of optimism for investors with market experts starting to believe that a soft landing in the economy had been achieved.
However, this optimism proved to be short lived as the S&P 500 fell by nearly 17% during the last six weeks of the quarter. The challenging market conditions during the third quarter were global in nature as equity markets throughout Europe and Asia experienced significant bouts of volatility just like the S&P 500. Market volatility during Q3 was driven by the same factors that
led to market weakness in the first half of the year. These factors include persistent inflation, tightening by central banks around the world, and the war in Ukraine.