Equities went from hitting record highs in early January to sinking into “correction” territory of double-digit losses, and then roaring back with big gains on the final day of trading.

When the dust settled Monday:

• The US Market Index fell 5.9% in January for its worst start to a year since 2009.
• The US market was up or down 2% on five separate days during January and >1% on 10 separate days.
• Value stocks beat growth by 11 percentage points, the largest margin since February 2001.
• Large growth stocks fell 12.9%, and mid-cap growth stocks declined 14.6%.
• Technology stocks tumbled 9% in their worst month of declines since March 2020.
• Consumer cyclical stocks dropped 10%, their worst monthly showing since March 2020.
• It was the worst January for tech stocks since 2008.

These volatile swings in the markets came amid an increasingly moving target for the Federal Reserve’s policy and interest rates. When inflation roared in late 2021, investors had to reset their expectations for the Fed. That has led to expectations that rates will increase higher and faster this year.

With stocks beginning the year with relatively high valuations, the market was susceptible to the type of declines seen during the month. That was particularly the case for many technology and consumer cyclical names that had led the way higher for the market in 2021.

“You can really see the lopsidedness of the selloff,” said Marta Norton, chief investment officer for the Americas at Investment Management. “Wherever the destruction was, whether the bottom is falling off as so many people are saying, what was selling the most is the favorites of the last couple years and what was holding up is the less exciting stocks of the last few years.” To a certain extent, you had a leveling off of the market.

And after a blistering 2021, with surging corporate profits and a powerful economic recovery from the pandemic recession ricocheting around the stock market, the US Market index reached another new high just days into the year. But things took a nosedive, fast.

That decline brought a sharp spike in volatility and a white-knuckle ride for investors. The market’s daily swings certainly measured better than that, to some degree by the close of trading each day. As an example, on Monday (24 Jan) stocks plunged by around 4% just after opening, but closed just about unchanged for the session.

In January, two of the biggest trends were technology and consumer cyclical stocks rolling over, and growth names generally collapsing.

Within the Style Box, performance differed sharply between stocks based on where they fell on the value vs. growth style spectrum. That was a reversal from the performance of 2021, when the market cap of a stock was a better indicator of performance than whether it was value or growth.

But not over longer time frames: Growth and blend stocks still tend to enjoy a big advantage over value, part of which reflects value’s travails in 2020 when growth trounced value by record distances. Large- and mid-cap growth stocks in particular are still very far ahead versus value stocks and smaller companies.

The other major theme in January was the cascading crash of tech and consumer cyclical stocks. These sectors had been key contributors to the market’s 2021 rally, and many stocks in these groups were trading at nosebleed valuations. The declines in tech have come as investors recalibrated to a view of higher interest rates and moderating economic growth for this year.

Among the big-name technology and consumer stocks dragged lower in January are NVIDIA (NVDA), down 17% for January after a 125% run in 2021, Microsoft (MSFT), down 7.5% last month after a 52.2% gain in 2021, and Tesla (TSLA), down 11.4% so far in 2022 after a 49.8% gain last year.