The US stock market is on track for its worst first-half performance in more than 50 years as inflation accelerates and interest rates rise, according to a comprehensive report by the Hong Kong-based Wande news agency. Fortunately, the bad first half is coming to an end, and although the market may still be volatile in the future, if history is any guide, US stocks may turn to rebound in the second half of the year and escape the bear's paw.

As of Wednesday, the s & p 500 was down 19.88% so far this year, pushing it towards its biggest first-half decline since 1970. According to the Financial Times, the US stock market has lost about $9tn this year. With the exception of energy stocks, all major sectors of the s & p 500 recorded declines, with non-essential consumer stocks falling the most, down 32 per cent, while utilities, which are thought to be a hedge against inflation, fell the least, down nearly 3.1 per cent.

"everything is driven by inflation," said Paul Leech, co-head of global equities at Barclays. This has been the theme of this year, and it has become more and more intense. "

The Fed is actively tightening monetary policy to curb inflation, which is at a 40-year high. The central bank raised interest rates by 75 basis points this month and hinted that they could rise sharply again next month. Powell, chairman of the Federal Reserve, said that failure to raise interest rates quickly to combat high inflation could entrench soaring prices.

Given that the Fed will continue to raise interest rates, investors expect more volatility in the market in the future."this is the biggest risk right now-inflation and the Fed," said Katie Nixon, chief investment officer of Northern Trust Wealth Management. Nixon said she would keep a close eye on economic data to measure the impact of higher interest rates on economic growth in the coming months.

Citigroup Inc US stock strategist Scott Chronert said: "the stubborn inflation data have prompted the Fed to respond more and more harshly, shifting the policy focus to fighting inflation, although this may have an impact on the economy." Faced with concerns that the Fed will continue to raise interest rates and that earnings expectations will be reset, investors should be hesitant to buy stocks. "

Even investors who have been looking for buying opportunities recently focus on individual companies rather than buying widely. They acknowledge that the current economic environment-stubbornly high inflation, rising borrowing costs and an expected slowdown in growth-makes it difficult to be enthusiastic about many parts of the market.

Economists surveyed by the Wall Street Journal in June said they thought there was a 44% chance of a recession in the United States in the next 12 months, compared with 18% in January. History also shows that the Fed rarely achieves a "soft landing". According to the St. Louis Fed's study of the monetary policy tightening cycle since the 1980s, the United States has experienced four recessions in the past six times when the Fed began to raise interest rates.

But,The good news for investors is that the market does not always underperform after a sharp setback in the first half of the year. In fact, history shows that the trend tends to be the opposite in the second half of the year.

According to the Wall Street Journal, when the S & P 500 fell at least 15% in the first half-- such as 1932, 1939, 1940, 1962 and 1970-- the average return in the second half was 24%, according to Dow Jones market data.

One of the reasons the market often rebounds quickly after a sharp correction is that investors eventually step in and bet on excessive price falls. In his June investor survey, Bank of America Corporation found that fund managers currently have above-average cash positions and below-average equity positions, and investors are significantly more pessimistic about the economy. Strategists at the bank said in a separate report that these and other factors made the market look "painfully oversold", so there could be opportunities for a rebound.

The S & P 500 confirmed a bear market on June 13, and history shows that the market is likely to recover from the bear market at a faster pace.

According to Lindsey Bell, chief monetary and market strategist at Forbes,Ally, the current bear market has historically been light compared to many since 1946. She points out that if the Fed can hold down inflation, the likelihood of a "mild" slowdown in the economy will rise, making a "shallow bear market" possible. Once the stock market hits bottom, returns in the coming year tend to be strong, Bell added.

Ryan Detrick, chief market strategist at LPL Financial, predicts that if full-blown crises and recessions such as those in 2000-2002 and 2008-2009 can be avoided, the bear market could bottom out soon. More than half of the past five bear markets ended in three months or less, and "the current bear market may be closer to the bottom than many expected," he said. How the bear market ends may depend on the pace of falling inflation, which will determine when and how much the Fed will raise interest rates, he added.