The S&P/ASX 200 Index (ASX: XJO) has just finished the day 1.25% lower at 6,932 points.
This means the benchmark index has lost 4.2% of its value this week, which is the worst weekly performance in over two years.
In fact, the last time the ASX 200 recorded a greater weekly decline was at the height of the pandemic in April 2020.
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What caused the ASX 200 to tumble?
Investors were hitting the sell button in a panic this week following the Reserve Bank of Australia's cash rate meeting.
That meeting, and its larger than expected rate hike, has led to the market now forecasting a cash rate of 3% by the end of the year. This was unthinkable at the start of the year when rates were practically at zero.
Investors appear concerned that this could slow economic growth and even risk a recession. There are also worries that borrowers could struggle with repayments if rates rise in line with the market's expectations.
Unsurprisingly, because of the latter, the banks were among the worst performers on the ASX 200 index this week.
For example, the Westpac Banking Corp (ASX: WBC) share price sank 13.1% and the Commonwealth Bank of Australia (ASX: CBA) share price lost 11% of its value over the five days.
But they weren't the worst performer on the index. That unwanted title goes to the Zip Co Limited (ASX: ZIP) share price with its 20.3% weekly decline.
Weakness in the tech sector and news that Apple has launched its buy now pay later (BNPL) offering, Apple Pay Later, led to rampant selling. The Zip share price is now down over 85% in 2022, making it also the worst performer on the ASX 200 year to date.
Here's hoping for a rebound next week!
