Stock Market Plunge: Which Sectors are Suffering Most?
If you’re avoiding year-to-date stock market charts or unsettled by the six-month performance of your portfolio, you’re not alone. There’s been a significant stock market plunge in 2022, and virtually every sector is down (save for utilities and energy stocks). For most investors, it’s not if you’re down; it’s how much you’re down.
Year-to-date, the S&P 500 is down about 18%. The Dow Jones Industrial Index has shed about 13%. The Nasdaq Composite Index is in the red a whopping 29%. The question is, what’s driving these losses? Which sectors are suffering the most?
Here’s a look at the biggest losers of 2022: the sectors propelling the stock market plunge due to bad earnings, poor outlooks and negative investor sentiment.
Consumer Discretionary: -28% Year-to-Date
The hardest-hit of any sector in 2022 has been consumer discretionary stocks. The reason? Inflation is absolutely pummeling the economy, and wages haven’t risen at a comparable rate. With less discretionary income to spend, people simply aren’t buying. As a result, the companies that rely on this purchasing to drive revenue and profits are suffering.
The biggest losers in this sector are some of the largest companies in the country today. Amazon (NASDAQ: AMZN) is down more than 35%, Tesla (NASDAQ: TSLA) is down more than 36%, Starbucks (NASDAQ: SBUX) is down more than 37%, Home Depot (NYSE: HD) has dropped more than 31% and Nike (NYSE: NKE) is down more than 34%.
Technology: -24% Year-to-Date
The stock market plunge has battered tech stocks this year. Many were valued at astronomical forward-looking figures, and the tough economic climate has peeled away market capitalization at a rapid rate as a result.
Here again, the biggest losers in the tech sector are some of the largest companies in the world. Apple (NASDAQ: AAPL) and Microsoft (NASDAQ: MSFT) are both down more than 20%. Nvidia (NASDAQ: NVDA) has lost more than 42% of its market cap, alongside Advanced Micro Devices (NASDAQ: AMD) which is down more than 33%. Even tech giants like Salesforce (NYSE: CRM) and Cisco Systems (NASDAQ: CSCO) are down more than 30% apiece.
Consumer Defensive: -21% Year-to-Date
While they tend to thrive during periods of economic hardship, consumer defensive stocks are hurting so far in 2022. While they’re likely to rebound at a quicker pace than other sectors, these stocks are nonetheless some of the biggest losers of the year so far.
Leading the way for negative return during this stock market plunge are several household names. Costco (NASDAQ: COST) has shed almost a quarter of its market cap year-to-date. Target (NYSE: TGT) is down more than 33%; more than double its primary competitor, Walmart (NYSE: WMT), which is also down about 15%. Even Dollar General (NYSE: DG) is down nearly 18%.
Communication Services: -20% Year-to-Date
The communication services sector isn’t hurting as bad as others; however, it’s being absolutely anchored by massive losses from several mega cap brands. Of the sectors to make headline news so far this year, communication services leads the way.
The loss leaders in this sector include Disney (NYSE: DIS), which is down more than 31%, Meta Platforms (NASDAQ: FB), down over 40%, and Match Group (NASDAQ: MTCH), which is down more than 40%. The largest market cap loss of the year belongs to Netflix (NASDAQ: NFLX), which shed almost 70% of its market cap over the course of a week! Even Google (NASDAQ: GOOG) is down more than 20%.
Transportation: -16% Year-to-Date
Logistics continues to be a nightmare post-pandemic. As the country struggles with everything from rising gas prices to truck driver shortages, transportation stocks have suffered. From rail to intermodal, last-mile to over-the-road trucking, transportation has slumped amidst the stock market plunge.
Railroads Union Pacific (NYSE: UNP) and CSX (NASDAQ: CSX) are down 14% and 18% respectively. Last-mile delivery leaders UPS (NYSE: UPS) and FedEx (NYSE: FDX) are both down roughly 20%. Over-the-road trucking and logistics providers are also hurting, with Old Dominion (NASDAQ: ODFL) down more than 30% and JB Hunt (NASDAQ: JBHT) down roughly 18%.
Financial: -13% Year-to-Date
The financial products and services sector doesn’t fluctuate all that much, which makes its double-digit sector returns something worth talking about during this stock market plunge. It’s not just fintech companies shedding value, either; some of the biggest banks in the world are down big this year.
Leading the losses in this sector is PayPal (NASDAQ: PYPL), which is down more than 50%. Among the big banking conglomerates, JPMorgan Chase (NYSE: JPM) has shed more than 20% of its market cap, followed by Bank of America (NYSE: BAC), which is down 20%. Regional banks aren’t faring better. PNC Financial Services (NYSE: PNC) has lost 19%, while First Republic Bank (NYSE: FRC) is down nearly 28%. Numerous other regional banks and midsized financial firms have posted double-digit declines so far this year.
A Lesson on Diversification and the Stock Market Plunge
The stock market is down across the board, but your portfolio losses are wholly dependent on your diversification. For instance, if you’re overweight in tech stocks, you’re likely down more than someone who’s diversified into finance and healthcare. Allocation matters, especially when the market is down. Now’s the time to look at your portfolio and ask yourself how you can rebalance for stability and a long-term positive outlook.
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