Tech crash starts: QQQ -9%, worst January since 2008
Monthly Performance
| Asset | Close | Change |
|---|---|---|
| S&P 500 (SPY) | 449.91 | -5.18% |
| Nasdaq 100 (QQQ) | 355.68 | -8.97% |
| Russell 2000 (IWM) | 200.27 | -9.68% |
| 20Y+ Treasury (TLT) | 141.34 | -3.60% |
| Gold | 1797.00 | -1.75% |
| VIX | 24.83 | +44.30% |
| Bitcoin | 38,466 | -16.90% |
Macro Dashboard
| Indicator | Month-end | vs. prior | vs. YoY |
|---|---|---|---|
| Recession probability (CVRP) | 30.00 | +21.00 | −16.00 |
| 10Y Treasury yield | 1.79% | +0.27pp | +0.68pp |
| 2s10s spread | 61bps | −18bps | −39bps |
| VIX | 24.83 | +7.61 | −8.26 |
| HY credit spread | 363bps | +53bps | −21bps |
| CPI (headline, YoY %) | 7.56% | — | — |
| Unemployment rate | 4.00% | +0.10pp | −2.40pp |
| WTI crude | $89.16 | +$13.83 | +$37.00 |
Values captured at month-end (last available daily observation). Sources: FRED (rates, credit, commodities, labor), BLS (CPI), Convex proprietary indices (CVRP).
What Happened
January 2022 inaugurated the 2022 bear market with a concentrated tech-sector decline. The catalyst was the accelerating Fed hawkish shift: December FOMC minutes released January 5 revealed plans for QT to begin "relatively soon after" the first rate hike, shifting terminal rate expectations meaningfully higher. The 10Y Treasury yield rose from 1.51% at year-start to 1.79% by month-end, compressing growth multiples.
The Nasdaq 100 fell 9% on the month, with intra-month drawdown reaching -15% at the January 24 intraday low. Unprofitable growth segments were devastated: ARKK -20%, IPO ETF -23%, meme stocks collapsed. Cathie Wood's flagship innovation ETF began a multi-year underperformance that would run through 2024. Growth-to-value rotation accelerated: energy sector gained 19% on rising oil prices, financials gained 0.7% on rising yields.
The month established the 2022 regime: rising real rates, tech-led equity weakness, commodity strength, and wider credit spreads. Bitcoin fell 17% as risk-off positioning dominated crypto. The monthly VIX close of 24.8 was elevated but masked multiple intra-month spikes above 38. The January performance was a clear precursor to the full-year 2022 bear market, which would see the S&P 500 down 19.4% and Nasdaq 100 down 33%. January's violent start was a microcosm of the year ahead.
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