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2018 Was the Worst Year in a Decade for US Stocks

The stock market of the past year was turbulent to say the least, with all major stock indexes posting the worst annual performance since 2008 - America's most recent financial crisis.

At the end of 2018 S&P 500 and Dow Jones Industrial Average decreased 6.2 percent and 5.6 percent, respectively, for 2018. The Nasdaq Composite dropped 3.9 percent in 2018.

For the past three years, The S&P 500 and Dow posted annual gains, 6 years of gains for Nasdaq. But all streaks were broken in 2018 -  an unpredictable year, marked with record highs and tumultuous downturns.

Interestingly, 2018 also is the first time in history that The S&P posted annual losses with the first three quarters of the year ending in gains. 

The majority of fourth quarter losses came after a devastating December. All indexes dropped at least 8.7 percent for the month. Perhaps most scary, is that this was the worst December since 1931 (The Great Depression) for the The Dow and S&P 500. 


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Much of this uncertainty of the market can be attributed to the ongoing trade wars with China and other world leaders. "The threat of an escalating trade war has chilled US business confidence, with managers uncertain as to if/how they should restructure global supply chains," says Nicholas Colas, co-founder of DataTrek Research.

"The most bullish case here is that the tariff issue will be settled in Q1 2019, and a meaningful resolution should be enough to trigger a first half rally for stocks," Colas added. "Against that optimistic take are two bearish outcomes: one, that these negotiations take longer and two, that they fail outright."


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