Four years. It sounds like a lifetime in the world of finance, yet the echoes of mid-January 2022 are still ringing in the ears of anyone who didn't sell their tech bags in time. If you look at the stock market 4 years ago today, you’ll find a landscape that was technically "closed" for the Martin Luther King Jr. Day holiday, but the vibes? They were absolutely rancid.
The party was over. We just didn't want to admit it.
Actually, January 17, 2022, was a Monday. While the physical floor of the New York Stock Exchange was quiet, the futures markets and the data from the previous Friday told a story of a market teetering on a cliff. The S&P 500 had just finished its second straight week of losses. The Nasdaq? It was already down for three weeks straight. People were starting to realize that "transitory" was a lie.
The Brutal Reality of the Stock Market 4 Years Ago Today
Honestly, the biggest thing most people forget about early 2022 is the sheer speed of the sentiment shift. We had just come off a 2021 where the S&P 500 rose nearly 27%. Money felt free. Then, suddenly, the Federal Reserve stopped playing nice.
By January 17, 2022, the 10-year Treasury yield was creeping toward 1.8%. That doesn't sound like much today, but back then, it was a massive wake-up call for tech investors. High interest rates are basically kryptonite for growth stocks. When the "risk-free" rate goes up, nobody wants to pay a premium for a company that might make money in 2030.
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Why the Tech Sector Was Self-Destructing
It wasn't just a small dip. It was a liquidation.
- Netflix was about to report earnings that would eventually send it into a tailspin.
- Meta (still recovering from its name change) was hemorrhaging cash on the Metaverse.
- Peloton—the darling of the lockdown—was falling apart as people realized they actually hated exercising in their living rooms.
Retail sales had just tumbled 1.9% in December 2021. Consumers were tapped out. Inflation was sitting at a 40-year high of 7%, and Jerome Powell was no longer talking about "supporting the recovery." He was talking about "taming the beast."
What Most People Get Wrong About January 2022
A lot of folks think the crash happened because of the invasion of Ukraine. That's a common misconception. While the geopolitical tension definitely added fuel to the fire later in February, the stock market 4 years ago today was already breaking down because of internal rot.
Valuations were insane.
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The forward P/E ratio of the S&P 500 at the end of 2021 was 23.3. For context, the 10-year average is usually closer to 16.9. We were paying a massive premium for growth that wasn't sustainable once the "stimmy" checks stopped hitting bank accounts.
The JPMorgan Warning
Around this time, Jamie Dimon was famously warning that the Fed might have to raise rates more than the market expected. He mentioned four, maybe even seven hikes. People thought he was being dramatic. He wasn't. The Fed ended up hiking rates 11 times.
If you were looking at your portfolio on that cold Monday in January 2022, you were likely seeing red across your speculative plays. Crypto was also in a freefall. Bitcoin had already dropped significantly from its November 2021 highs, proving it wasn't the "inflation hedge" everyone claimed it would be.
The Energy Anomaly: Where the Money Actually Was
While tech was dying, Energy was having a literal moment. The Energy Select Sector SPDR (XLE) had gained 2.4% just on the Friday before the holiday. Crude oil was on its way to a 17% gain in a single month.
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It was a total rotation.
Investors were fleeing "innovation" and sprinting toward "real stuff"—oil, gas, and banks. Wells Fargo had just crushed earnings, with its stock surging 3.7% because higher interest rates actually help banks make more money on loans. It was the Great Re-Rating.
Lessons for Today's Investor
Looking back at the stock market 4 years ago today, the biggest takeaway isn't about the specific numbers. It's about the macro environment. You can't fight the Fed. When liquidity is being pulled out of the system, it doesn't matter how "disruptive" a company is—its stock is going down.
Actionable Insights from the 2022 Correction:
- Watch the Yield Curve: The 10-year Treasury is often a better indicator of stock health than the ticker itself. When yields spike, tech gets spiked.
- Valuation Matters: Buying a great company at a terrible price is still a bad investment.
- Diversification Isn't Just Tech: If your "diversified" portfolio was just Apple, Amazon, and Google, you got wrecked in 2022. Real diversification means owning things that move in opposite directions, like Energy and Financials during a rate hike cycle.
- Cash is a Position: Sometimes, sitting on the sidelines is the most profitable trade you can make.
The bear market of 2022 eventually bottomed out in October, but the pain started right here, four years ago. It was a slow-motion car crash that taught a whole generation of "diamond hands" traders that gravity still applies to Wall Street.
To stay ahead of the next cycle, verify your portfolio's exposure to interest-rate-sensitive sectors. Rebalance away from overextended P/E ratios when the Fed shifts its tone. Don't wait for the headline news to tell you what the price action already has.