S&P 500 lost $4.4 trillion over last year

Patrick Bunsci

22 February 2023

The aggregate market capitalisation of Standard and Poor’s 500 (S&P 500) index declined by 10.9% between the end of January 2022 and end of January 2023, totalling $4.4 trillion in losses, according to UK-based consultancy GlobalData.

Year-on-year, the S&P 500 – which tracks the performance of 500 of the largest companies listed on the US stock exchange – dropped from $40.7 trillion to $36.3 trillion in market cap.

The ‘consumer discretionary’ (that is, providers of non-essential goods and services) and communication services sectors bore the brunt of market losses, losing $3.9 trillion and $3 trillion in market cap, respectively.

The tech sector saw a $1.9 trillion market cap drop, reaching a total of $9.4 trillion.

The real estate (RE) sector also reported a 9.4% loss, reaching around $1 trillion.

Among the worst performers in the RE space were Boston Properties, reporting a 33.4% loss, and Essex Property, with a 32.4% loss. The standouts were VICI Properties (up 96.3%) and Iron Mountain (up 19.3%).

“Over the period, the S&P 500 index posted a 9.7% decline in annual return,” said Murthy Grandhi, a GlobalData analyst.

However, “on a positive note,” Grandhi added, “[the index] has rebounded 14% from its lowest level on 12 October 2022”.

Energy companies have otherwise bucked the wider trend, seeing 33.8% market value percentage growth over the last year, reaching a market cap of $1.8 trillion. Among the energy companies growing more than 30% included Occidental (67.4%), Hess (62%), Valero (59.1%), EQT (49.3%), Exxon Mobil (48.6%), Schlumberger (47.6%), Marathon (36.4%), Halliburton (36%), and Chevron (32.9%).

Grandhi predicts a potential rebound in the S&P 500 this year, citing improved investor sentiment, largely owing to moderating inflation, a declining unemployment rate, an easing of supply chain disruptions, and expectations of a slower rate hike from the Federal Reserve.

“Positive investor sentiment is picking up the momentum, which can be seen in the fact that S&P 500 index was already up by 1.7% as of 15 February 2023, from the level it was at on 31 January 2023.”

The S&P 500’s top 10 stocks—Apple, Microsoft, Alphabet, Amazon, Berkshire Hathaway, Tesla, NVIDIA, Exxon Mobil, Visa, and UnitedHealth—account for more than a quarter (26.5%) of the index’s aggregate market cap.

As of Tuesday 21 February, the S&P 500 index sits at 4,079, down 226 points (-5.2%) year-on-year – and lagging considerably behind its record high of 4,766 reached at the end of 2021.

Australia’s All Ordinaries index, which tracks the top 500 largest ASX-listed companies, has managed to buck its US counterpart, trading up slightly by 40.3 points (+0.54%) between 21 February 2022 and 21 February 2023.