Investors believe aggressive Fed will keep stock market down for the rest of 2022, CNBC survey shows

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The Federal Reserve's astir assertive gait of tightening since the 1980s is making the bulk of Wall Street investors judge stocks volition beryllium underwater for longer, according to the new CNBC Delivering Alpha investor survey.

We polled astir 400 main concern officers, equity strategists, portfolio managers and CNBC contributors who negociate money, asking wherever they stood connected the markets for the remainder of 2022 and beyond. The survey was conducted this week.

Fifty-eight percent of respondents said their biggest interest for the markets close present is the Fed being excessively aggressive. The cardinal slope past week raised rates by three-quarters of a percent points for a 3rd consecutive time and pledged much hikes to bushed inflation, triggering a large sell-off successful hazard assets.

"While this assertive gait of hiking should bring ostentation person to the 2% target, it volition besides apt bring economical hardship," said Principal Global Investors Chief Global Strategist Seema Shah. "The Fed's tolerance for economical symptom doesn't bode good for hazard assets. ... Get defensive, times are getting tougher."

More than 60% of the investors judge the S&P 500 volition extremity the twelvemonth beneath 4,000, which would construe into a 16% nonaccomplishment for the year. Still, the 4,000 level astir 8% higher than wherever the benchmark traded Tuesday.

Rising rates and volatility successful currency markets caused the S&P 500 to driblet 1% connected Monday, taking retired its June low. The Dow Jones Industrial Average besides slipped into a carnivore market, down astir 20% from its Jan. 4 closing high.

"The marketplace absorption to aboriginal net releases suggests that slowing economical enactment is obscurity adjacent priced in," said Lauren Goodwin, economist and portfolio strategist astatine New York Life Investments. "Earning estimates are apt to proceed their diminution until we spot a bottoming successful starring economical indicators. We are not determination yet, suggesting volatility up for hazard assets."

While investors expect much chaotic moves successful the markets, they inactive deliberation the U.S. remains the champion spot for their money, the survey showed.