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In our Market Monday insights, Prosperity Investment Management examines the latest developments across the globe's biggest financial markets - providing you with all the latest information you need to know.
US stocks have seen their worst first half of a year since 1970, as concerns grow over how the steps taken to curb inflation will affect economic growth.
In the last six months, the benchmark S&P 500 index fell 20.6%, while other major US indexes also dropped sharply.
Stocks in the UK, mainland Europe and Asia have also suffered steep losses. It comes as central banks around the world attempt to manage soaring living costs, with prices of essential goods like food and fuel rising rapidly around the globe.
Some economists expect the US, which is the world's biggest economy, to go into a recession as early as this year as interest rates continue to rise.
Shares are likely to see continued short-term volatility as central banks continue to tighten as they look to combat high inflation, the war in Ukraine continues and fears of recession remain high.
Another major US stock index, the Dow Jones Industrial Average, fell by more than 15% in the first half of this year, marking it the biggest drop for this period since 1962.
Major stock market indexes outside the US have also fallen drastically this year. The UK's FTSE 250 has dropped by more than 20%, whilst Europe's Stoxx 600 index has slipped by almost 17% and the MSCI index of Asia-Pacific markets has fallen by more than 18%.
It comes as many of the world's biggest central banks introduce measures to slow the rising cost of living, including raising interest rates.
Earlier this week, the bosses of three of the world's biggest central banks warned that the era of moderate inflation and low interest rates had ended.
At an annual meeting in Portugal, the heads of the US Federal Reserve, European Central Bank and Bank of England said action must be taken swiftly to prevent price rises from getting out of control.
However, they also cautioned that measures to rein in an inflation shock caused by the Ukraine war and pandemic may have a significant negative impact on global growth.
