15 Worst Performing Industries in 2023

Hamna Asim
20 min read

In This Article:

In this article, we discuss 15 worst performing industries in 2023. If you want to skip our detailed discussion on the performance of the stock market in 2023, head directly to 5 Worst Performing Industries In 2023.

In August, Reuters mentioned that according to data from Refinitiv, the projected earnings growth for S&P 500 companies in 2023 stands at 1.8%. Additionally, the index's forward 12-month price-to-earnings ratio has risen to nearly 19, up from 17 at the end of 2022, and it surpasses its historical average of almost 16. Terry Sandven, the chief equity strategist at U.S. Bank Wealth Management, suggested that the S&P 500 might presently be experiencing a correction phase. He has set a year-end target of 4,600 for the index. He also mentioned that persistent inflation negatively impacts valuations since it implies the Federal Reserve adopting a more hawkish stance for an extended period. Elevated interest rates due to ongoing inflationary pressures lead to reduced present values and lower stock prices.

In September 2023, the S&P 500 experienced a 4.5% decline despite relatively positive economic indicators. Two primary factors that impacted stock prices in the third quarter and will continue to be significant in October are inflation and interest rates. During September, the Federal Open Market Committee chose to maintain the interest rate range of 5.25% to 5.5%. However, Fed Chair Jerome Powell emphasized the need for further effort on managing inflation before ruling out additional interest rate increases. The Fed's economic forecasts indicate the potential for one more rate hike before reaching the final rate for the current economic cycle. The bond market estimates an 18.3% probability of a 25 basis points rate hike by the Fed on November 1, contrasting with an 81.7% chance that the FOMC will opt not to raise rates once more, as per CME Group. Real personal spending in the United States grew by 0.1% in August, a significant slowdown compared to the 0.6% growth observed in July. The Fed is at a crucial point in its efforts to combat inflation, and the coming months will determine whether it can steer the U.S. economy toward a soft landing without the risk of a recession.

On the other hand, during 2023, the NASDAQ Composite, which monitors the performance of all stocks listed on the NASDAQ stock exchange, experienced a 34% increase in August. This surge has been driven by the influence of artificial intelligence and indications that the nation's economic recovery is progressing more smoothly than initially predicted. In August, U.S. equities faced a downturn, marking the first monthly decline for the S&P 500 and NASDAQ-100 Indices since February this year. The "Magnificent Seven," which contributed to over 75% of the NASDAQ-100 gains in 2023 through July, delivered mixed results during August. Although artificial intelligence remains a significant growth driver, the NASDAQ-100, with its heavy emphasis on the tech sector and AI-related discussions, experienced a 1.5% decline for the month of August. Nonetheless, it remains up by over 42% year-to-date.

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