The Year the Long Stock Market Rally Ended

How fast inflation and high interest rates upended markets across the globe.

By Joe Rennison

Graphics by Karl Russell and John-Michael Murphy

Joe Rennison has spent a decade reporting on markets. Karl Russell and John-Michael Murphy pored through years of stock and market data to visualize trends for this article.

Jan. 3, the first day of market trading in 2022, looked like just another day in a stock rally that began when Barack Obama was still president. The S&P 500 hit a record high. Tesla, the company that upturned the auto industry and made many investors rich, rose 13.5 percent and came close to its own all-time peak.

That Monday, it turned out, was actually the end of a market that for over a decade had gone mostly in one direction, with the S&P 500 rising more than 600 percent since March 2009.

Just two days later, the Federal Reserve released the minutes from its previous meeting — a typically routine event on Wall Street — revealing that policymakers at the central bank were so worried about inflation that they thought they might need to accelerate how fast they raised interest rates.

Investors took it badly, causing the S&P 500 to tumble 1.9 percent and sparking a stock sell-off that set the stage for the rest of the year.

The past 12 months have marked a generational shift for financial markets as the Fed, racing to contain the worst inflation in decades, repeatedly jacked up interest rates. Its efforts have begun to pay off: Price increases have been slowing recently.

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