Market Outlook · July 06, 2022

Making Sense: Worst First Half of the Year for Equities Since 1970

Brent Ciliano

CFA | SVP, Chief Investment Officer

Phillip Neuhart

SVP, Manager of Institutional Portfolio Strategy


The first half of 2022 has continued the rocky path of multi-decade high inflation, global supply chain issues, slowing US and global growth, geopolitical conflict, the war in Ukraine, and—possibly most importantly for equity and fixed income markets—massive change in Federal Reserve monetary policy compressed into a short period of time.

In response to these pressures, the S&P 500 experienced the fourth worst first half of a year since 1928.

Key takeaways

  • S&P 500 performance from June through year-end was mixed and choppy. Average and median returns were flat.
  • Subsequent cumulative market returns 1, 3 and 5 years from June lows saw the S&P 500 positive for 60%, 80% and 93% of observations, respectively.
  • 1-, 3- and 5-year cumulative returns after June lows for the S&P 500 were up 16%, 43% and 82% on average, respectively.
  • The average and median time to recovery back to beginning-of-year values were 20 and 14 months, respectively.
  • The top 5 largest drawdowns saw both much higher average subsequent cumulative market returns 1, 3 and 5 years after June lows (44%, 60% and 123%, respectively), as well as much faster average and median recovery times of 10 and 5 months.

The bottom line

Historically, poor starts to the year have seen mixed results through the end of the year but significant gains 1, 3 and 5 years after market lows.

Staying invested and having both a forward-looking view and a comprehensive financial plan may help investors better weather the storm.

View the PDF below for a more in-depth look at how markets responded to the fourth worst half of the year since 1928.

This information is provided for educational purposes only and should not be relied on or interpreted as accounting, financial planning, investment, legal or tax advice. First Citizens Bank (or its affiliates) neither endorses nor guarantees this information, and encourages you to consult a professional for advice applicable to your specific situation.

Links to third-party websites may have a privacy policy different from First Citizens Bank and may provide less security than this website. First Citizens Bank and its affiliates are not responsible for the products, services and content on any third-party website.

Your investments in securities, annuities and insurance are not insured by the FDIC or any other federal government agency and may lose value. They are not a deposit or other obligation of, or guaranteed by any bank or bank affiliate and are subject to investment risks, including possible loss of the principal amount invested. Past performance does not guarantee future results.

First Citizens Wealth Management is a registered trademark of First Citizens BancShares, Inc. First Citizens Wealth Management products and services are offered by First-Citizens Bank & Trust Company, Member FDIC; First Citizens Investor Services, Inc., Member FINRA and SIPC, an SEC-registered broker-dealer and investment advisor; and First Citizens Asset Management, Inc., an SEC-registered investment advisor.

Brokerage and investment advisory services are offered through First Citizens Investor Services, Inc., Member FINRA and SIPC. First Citizens Asset Management, Inc. provides investment advisory services.

Bank deposit products are offered by First Citizens Bank, Member FDIC.