US Stocks Notch Biggest Annual Decline Since 2008, Market Volatility Increases

US stocks closed lower on last trading session of the year, with the three main indices recording their first yearly decline since 2018.

The Fed's aggressive rate increases impacted stocks last year, with the benchmark S&P 500 losing 19.4%, and the Dow dropping around 9% in 2022. Growth stocks remained under pressure from increasing yields for most part of the year.

Investors also assessed the economic data which showed the Chicago PMI rising to 44.9 points in December from 37.20 points in the prior month, which was the weakest reading since June 2020.

Majority of the sectors on the S&P 500 closed on a negative note, with real estate and utilities stocks recording the biggest plunge on Friday. However, energy stocks bucked the overall market trend, gaining around 0.8% during the session.

The Nasdaq 100 slipped 0.10% to close at 10,939.76 on Friday, amid slight decline in shares of Amazon.com, Inc. AMZN and Microsoft Corp MSFT.

The S&P 500 declined 0.25%, while the Dow Jones fell 0.22% to 33,147.25 in the previous session.

The Chicago Board Options Exchange's CBOE Volatility Index (VIX) rose 1.1% to 21.67 points on Friday.

What is CBOE Volatility Index?

The CBOE Volatility Index, popularly known as VIX, is a measure of the equity market's expectation of volatility based on S&P 500 index call and put options.

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