(Reuters) – Nasdaq stock listings have fallen nearly 80% this year as appetite for new issuance has been hit by extreme stock market volatility fueled by the Federal Reserve’s war on inflation.

A total of 156 companies have listed on the stock exchange this year, raising about $15 billion in initial public offerings, a far cry from the 743 companies that raised $180 billion in the 2021 blockbuster, data from the exchange operator showed.

The drop in IPO activity comes as U.S. stock markets have been reeling for most of the year due to a sell-off as the Fed took an aggressive stance on interest rates.

The US central bank raised interest rates on Wednesday as expected, but shocked investors by saying rates will stay higher for longer.

The Fed’s policy-setting committee forecast it would continue to raise interest rates to above 5% in 2023, a level not seen since the 2007 economic downturn, dashing hopes that the central bank would halt its hiking cycle early next year.

The year has been particularly rough for tech companies, as rising interest rates have pushed up government bond yields, making high-growth stocks less attractive. It also affected tech IPOs, which generally make up the bulk of US listings.

For the year, the Nasdaq tech index is down 28%, well below the S&P 500’s 16.2% drop and the blue-chip Dow Jones Industrial Average’s 6.5% drop.

The year also saw a big drop in blank-check company listings, as regulatory concerns and their free-falling stock prices appear to have put a damper on Wall Street’s hottest investment trend of 2021. A total of 68 SPACs listed on the exchange in 2022. compared to 110 last year.

Graphical. Capital raised through IPOs to decline in 2022 https://www.reuters.com/graphics/NASDAQ-IPO/dwpkddzzxvm/chart.png

A lull in the IPO market is expected to extend into the first half of 2023, Nasdaq CEO Adena Friedman said last month, adding that it will pick up in the second half of the year.

Graphical. Number of IPOs to decline in 2022 https://www.reuters.com/graphics/NASDAQ-IPO/lbpggglldpq/chart.png

(Reporting by Mehnaz Yasmin and Akash Sriram in Bengaluru; Editing by Anil D’Silva)

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