Covid Stocks That Got Annihilated In 2022

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Written on:
17 November 2022
Last edit:
16 March 2023

The coronavirus pandemic was a tough time for the world. Millions of lost lives and jobs took its toll on the global economy. However, the story was different with capital markets. The US stock market alone saw historic growth in 2020 and 2021. The stay-at-home orders and government stimulus checks found their way onto the stock market, which meant billions of dollars in added capital that were needed to find a new place to call home. All of this influx resulted in disproportionate growth for financial services and subscription-based companies. 

This report will look at the downfall of some of the biggest pandemic gainers, compare their recent financial results and try to gauge what the future may hold for these seemingly out-of-favor stocks. 

The Boom and the Bust

The capital influx throughout the pandemic years of 2020 and 2021 led to considerably overvalued tech stocks and a stock buying frenzy across the board. Billions of dollars of foreign capital also entered the US - viewing these stock markets as the best place to park capital while the pandemic lockdowns continued in most countries around the world. 

While the “real” economy was seemingly crumbling, the stock market was surging to never before seen highs. This was especially evident within the fintech and subscription-based companies, which were among the most heavily overvalued assets tradable on the stock market. It was becoming increasingly evident that this growth could not continue uninterrupted forever. 

The start of 2022 saw high inflation and increasing fears of a global recession, which was followed by further supply chain disruptions caused by the russian invasion of Ukraine. These two factors combined triggered massive selloffs in the stock market, with growth companies taking the bulk of the damage. Companies that were seen as growth drivers during the pandemic, especially those that offered remote services, quickly started to lose steam and fall behind their S&P 500 counterparts. As we look back on the first three-quarters of FY2022, some of these companies are trading at incredible discounts, down over 100-200% from their pandemic highs. 


Roku is a digital media and video streaming company based in California. The company has a total active customer base of around 60 million users. The company also manufactures smart TVs under its brand name Roku TV, as well as being engaged in digital and video advertising, content distribution, subscription and billing services, as well as e-commerce transactions, brand sponsorships, and promotions. 

Stock profile and performance

roku stock profile and performance

The stock had its IPO on the Nasdaq on 28 September 2017. The company had since enjoyed stable growth, reaching $170 just before the start of the Covid-19 pandemic. 

The pandemic saw Roku’s share price soar well into the $400-$500 range, with market capitalization reaching above $60 billion. However, long-term investors were weary of this growth, given that the company’s income statements could not reflect even a portion of this market cap growth. Still operating at a loss, with revenue growth remaining relatively modest, it was evident that Roku was immensely overvalued at the time. The stock now trades below the $60 mark, which is a stark contrast to the aforementioned pandemic highs. 

Roku 3Q FY22 vs 3Q FY21

Let’s compare the financial results from the third quarter of FY2021 to the corresponding quarter of FY2022. 


3Q FY22

3Q FY21

Revenue$761.4 mln$680 mln
Cost of revenue$404.6 mln$316 mln
Net Income($122.2 mln)$68.9 mln
Diluted EPS(0.88)0.48
Assets$4,392.2 mln$3,912.3 mln
Liabilities$1,614.3 mln$1,228.7 mln
Equity$2,777.9 mln$2,683.6 mln
Free Cash Flow($29.7 mln)$94.6 mln

While revenue has seen decent growth, the company operates at a loss, which can be a difficult factor in getting investors back on board with Roku stock. Despite this, the balance sheet is strong, with total assets far outweighing total liabilities, thus, providing significant equity for shareholders. The net loss seen in 2022 can be attributed to rising operating expenses, which has been a common theme across many listed companies due to supply chain disruptions caused by the war. 

Peloton Interactive Inc (NASDAQ:PTON)

Peloton Interactive operates an interactive fitness platform using a touchscreen to stream live and on-demand fitness classes under the Peloton Bike, Peloton Bike+, Peloton Tread, and Peloton Tread+ brands. The company has approximately 7 million active users. Peloton was founded in 2012 and is headquartered in New York. 

Stock profile and performance

peloton stock.png

Peloton was seen as one of the quintessential Covid stocks, due to the rapid rise in demand for its fitness bikes and software. Covid lockdowns forced millions of people into close quarters and with gyms and other fitness facilities also becoming unavailable, investors were quick to jump on Peloton’s stock with the assumption that the introduction of millions of new customers would translate to decent amounts of loyal customers. While Peloton was certainly popular during the lockdown, it quickly fell behind once the restrictions were lifted and people could return to their usual fitness routines. This caused the stock to nosedive from the $150-160 range to as low as $8-9. This massive drop was also reinforced by declining revenues and with no sign of profitability, some investors quickly labeled Peloton as the new GoPro of the stock market. 

Peloton Interactive 1Q FY23 vs 1Q FY22


1Q FY23

1Q FY22

Revenue$616.5 mln$805.1 mln
Cost of revenue$399.2 mln$542.5 mln
Net Income($408.5 mln)($376 mln)
Diluted EPS(1.20)(1.25)
Assets$3,592.5 mln$4,414.5 mln
Liabilities$3,334 mln$2,907.6 mln
Equity$258.5 mln$1,506.9 mln
Free Cash Flow($2,357.3 mln)$219.9 mln

Unprofitability has been the main driver of Peloton’s downfall, which was further exacerbated by declining revenues. While a revenue drop-off was expected after the pandemic, this drop does not show the full story. The company has also stacked up liabilities and reduced total assets, which in turn reduces shareholder value. The negative cash flow figure represents Peloton’s attempts to pour some of its cash reserves into marketing and R&D to try to turn things around. However, the bearish sentiment surrounding Peloton is unlikely to turn around in the near future. 

DocuSign Inc (NASDAQ:DOCU)

DocuSign, Inc. provides electronic signature software in the United States and internationally. The company provides e-signature solutions that enable businesses to digitally prepare, sign, act on, and manage agreements. It also offers automated workflows across the entire agreement process, as well as other solutions, such as contract lifecycle management, remote online notary services, signer identification for governments, etc. 

DocuSign sells its products through direct, partner-assisted, and web-based mediums. It serves businesses of any size and structure. The company was incorporated in 2003 and is headquartered in San Francisco, California.

Stock profile and performance

docusign stock.png

DocuSign was one of the stocks that benefited greatly from the effect that Covid had on work culture. Businesses big and small opted to reconfigure their work processes. With a vast majority of the workforce working remotely, companies signed and enforced contracts and other important documents using DocuSign, which offers digital signatures as its primary solution. However, much like Peloton, DocuSign started running into issues after the stay-at-home measures had been lifted. Employees and executives returning to the office had little need for remote signatures. DocuSign executives were well aware of the coming reduction in revenues after the pandemic, but the combination of inflation and supply chain issues tanked the stock lower than expected. The stock tumbled from $300 to below $50 in 2022. 

DocuSign 2Q FY23 vs 2Q FY22


2Q FY23

2Q FY22

Revenue$622.2 mln$545.5 mln
Cost of revenue$136.7 mln$116 mln
Net Income($45.1 mln)($5.7 mln)
Diluted EPS(0.22)(0.03)
Assets$2,667.3 mln$2,410.5 mln
Liabilities$2,260.2 mln$2,171 mln
Equity$407.1 mln$239.5 mln
Free Cash Flow$105.5 mln$90 mln

While DocuSign’s latest quarterly revenue figure shows YoY growth, the company also posted increased losses. Despite this, the balance sheet for DocuSign remains quite solid. Cash flow is also decent, which could be enough reasons for DocuSign to regain some of its former positions once the broader global economy emerges from the seemingly inevitable recession. Future company events could shed some light on some of DocuSign’s planned projects. The closest such event is November 30, 2022, with the DocuSign Digital Day featuring talks about workflow digitalization and smart contracts. While the post-pandemic bear market took its toll on DocuSign’s stock, the company seems to be on a steady route of regaining investor confidence. 

PayPal Holdings Inc (NASDAQ:PYPL)

PayPal Holdings, Inc. operates a technology platform that enables digital payments on behalf of merchants and consumers worldwide. PayPal also provides digital payments, discounts, and transfers through its subsidiaries such as Braintree, Venmo, Xoom, Zettle, Hyperwallet, Honey, and Paidy. The company's payments platform allows consumers to send and receive payments in approximately 200 markets and 100 currencies. Clients can withdraw funds to their bank accounts in 56 currencies, and hold balances in 25 currencies. PayPal Holdings, Inc. was founded in 1998 and is headquartered in San Jose, California.

Stock profile and performance

paypal stock.png

PayPal’s rise during the pandemic years can be attributed to the growing demand for digital payments and fast transfers. Investor expectations played into the growing demand after the lockdown measures were implemented across the globe and the stock rose as high as $300 per share. However, the situation quickly switched after Covid and a few key factors can be highlighted as to why many investors still shy away from the stock, even after it fell below $100:

  • Questionable cost-cutting measures - PayPal started cutting costs by laying off some of its staff. While this may reduce fixed costs in the short term, layoffs alone cannot reduce the mounting operating costs for the company
  • The stock is still trading at a premium - Compared to competitors, PayPal is still an overvalued stock, even after falling below the $100 mark. Limited growth opportunities make PayPal less attractive for investors seeking disruptive growth stocks
  • Shrinking profit margins - Revenue and net income for 2022 have fallen short of analyst expectations. Operating costs and low growth are placing pressure on PayPal’s profit margins

PayPal 3Q FY22 vs 3Q FY21


3Q FY22

3Q FY21

Revenue$6,846 mln$6,182 mln
Cost of revenue$3,355 mln$2,832 mln
Net Income$1,330 mln$1,087 mln
Diluted EPS1.150.92
Assets$76,435 mln$74,534 mln
Liabilities$56,171 mln$52,444 mln
Equity$20,264 mln$22,090 mln
Free Cash Flow$1,766 mln$1,286 mln

While the financial statements may not show any inherent red flags, on closer inspection, the rising cost of revenue may be an issue for PayPal in the long run. Despite this, many analysts consider the sell-off to be an overreaction in an already fearful bear market. 

One catalyst that could help PayPal mark a turnaround is the introduction of crypto transactions to Venmo. Another key development is the decline of PayPal’s transaction expenses relative to total payment volume. Long-term investors in PayPal may have noticed the sheer amount of technology spending undertaken by the company, with a new digital wallet set to hit the market in Q3 2022. 

Netflix Inc (NASDAQ:NFLX)

Netflix, Inc. provides users with entertainment services. It offers original and licensed TV series, documentaries, feature films, and mobile games across various genres and languages, you can even find our top stock movies there. The company provides subscribers the ability to receive streaming content through a host of internet-connected devices, including TVs, digital video players, television set-top boxes, and mobile devices. Netflix also provides DVDs-by-mail membership services in the United States, which was the original business model of the company. Netflix has an average of 222 million paid members in 190 countries. Netflix, Inc. was incorporated in 1997 and is headquartered in Los Gatos, California.

Stock profile and performance

netflix stock.png

Netflix enjoyed explosive growth during the pandemic. With millions of people stuck at home, away from entertainment venues, Netflix and other streaming services became the prime destinations for evening entertainment. A host of original feature films and TV series helped boost Netflix’s paid subscriber count to over 220 million users. However, a major caveat to this was the duration of lockdowns, which allowed many users to sift through the bulk of Netflix’s digital library. After the lockdown measures were lifted, many users found themselves in an inflation-heavy environment with low job security and rising household costs. This put many on-demand subscriptions on the chopping block and Q1 of 2022 saw Netflix lose subscribers for the first time since going public. The company lost almost a million subscribers in Q1 2022. The outlook for Q2 was even direr, however, Netflix lost fewer subscribers than initially expected. This inability to turn things around in a bear market plummeted the stock down to $175, far off from the pandemic highs of over $600. 

Netflix 3Q FY22 vs 3Q FY21


3Q FY22

3Q FY21

Revenue$7,925.6 mln$7,483.5 mln
Cost of revenue$4,788.7 mln$4,206.6 mln
Net Income$1,398.2 mln$1,449.1 mln
Diluted EPS3.103.19
Assets$47,562.2 mln$42,739.9 mln
Liabilities$27,034 mln$27,425.2 mln
Equity$20,528.2 mln$15,314.7 mln
Free Cash Flow$471.9 mln($85 mln)

A quick glance at Netflix’s financials still shows a growing company YoY. While net earnings took a tumble, the company managed to turn its dismal Q1 and Q2 subscriber loss around - adding 2.4 million new subscribers in Q3 2022. 

The introduction of a new subscriber tier at $6.99 a month sees Netflix allowing commercials on its platform - something the company has refrained from doing for years. This additional ad revenue could be the catalyst for turning things around and boosting growth YoY. 

It must be noted that a drop-off in active viewership was to be expected since the pandemic, but it also led to a massively overstated valuation for Netflix. The stock currently holds a market capitalization of $136 billion and the stock has bounced back from the $175 lows in Q1 to $300 in Q3. Much will depend on Netflix’s ability to boost the production of original content and the performance of the $6.99 package in the long term. 

Shopify Inc (NYSE:SHOP)

Shopify Inc. provides a commerce platform and services in Canada and internationally. The company's platform enables merchants to display, manage, market, and sell its products through web and mobile storefronts, physical retail locations, pop-up shops, social media storefronts, and marketplaces. It also enables management solutions for day-to-day business processes. Shopify also sells custom themes and apps, domains, and merchant solutions, which include accepting payments, shipping, and fulfillment, as well as securing working capital. Shopify Inc. was incorporated in 2004 and is headquartered in Ottawa, Canada.

Stock profile and performance

shopify stock.png

WIth a majority of the world population staying at home, small businesses needed a place to continue their operations and deliver goods and services. This greatly increased the demand for online stores. Coupled with the generous stimulus measures undertaken by governments, consumers around the world had extra funds to spend to keep the economy going. This presented a great opportunity for Shopify to expand its business and welcome new customers aboard. Shopify stock rose over 400% throughout the pandemic, and as countries opened up and businesses were able to greet their customers once more, it became evident to investors that Shopify was greatly overvalued, which triggered a mass sell-off. 2022 has been a rough year for growth stocks and Shopify has been a growth favorite among the investing community for quite some time. 

Shopify 3Q FY22 vs 3Q FY21


3Q FY22

3Q FY21

Revenue$1,336.2 mln$1,123.7 mln
Cost of revenue$703.9 mln$514.8 mln
Net Income($158.4 mln)$1,148.4 mln
Diluted EPS(0.12)0.90
Assets$11,203.3 mln$13,536.5 mln
Liabilities$2,510.3 mln$2,166.2 mln
Equity$8,693 mln$11,370.3 mln
Free Cash Flow($199.7 mln)($32.2 mln)

The key issue in Shopify’s financials lies within the razor-thin profit margins, which was the case during Covid and has been exacerbated by the 2022 bear market. Investors that have been shying away from growth stocks saw this as a signal to sell the stock, which had been trading at an enormous valuation, which was on average 600 times the company’s earnings. The financial results posted by the company have not been enough to alleviate the macroeconomic tensions caused by an unstable global political climate and rising inflation across the board. Revenue growth has also slowed down somewhat, while the cost of revenue increases and exerts even more pressure on Shopify’s profitability. 

Asana Inc (NYSE:ASAN)

Asana, Inc., together with its subsidiaries, operates a work management platform for individuals, team leads, and executives in the United States and internationally. The company's platform enables teams to manage work from daily tasks to cross-functional strategies. The software suite also manages product launches, marketing campaigns, and organization-wide goal-setting. Asana serves customers across a wide array of industries. Asana, Inc. was incorporated in 2008 and is headquartered in San Francisco, California.

Stock profile and performance

asana stock.png

Much like Shopify, the bulk of Asana’s growth came from the need of organizations big and small to manage their workflows effectively. With most of the employees working from home, companies needed reliable solutions to keep projects going and manage the day-to-day processes of their operations. Investors were quick to see the potential of digital business solutions and started buying up Asana’s stock. The company reached a market capitalization of over $17 billion, which was profoundly overvalued due to the actual financial performance of the company. With annual revenues firmly below $1 billion, the 2022 bear market took its toll on the stock, which has fallen from $140 in 2021 to $20 in 2022. While YoY growth has been impressive, investors did not see Asana as an inflation-proof option for their capital. 

Asana 2Q FY23 vs 2Q FY22


2Q FY23

2Q FY22

Revenue$134.9 mln$89.5 mln
Cost of revenue$13.8 mln$9.9 mln
Net Income($113 mln)($68.4 mln)
Diluted EPS(0.59)(0.40)
Assets$707 mln$735,5 mln
Liabilities$503.2 mln$456.2 mln
Equity$203.8 mln$279.3 mln
Free Cash Flow($42.3 mln)($9.3 mln)

Asana’s financials are typical for a growth-oriented software - with revenue growth, negative free cash flow and a net loss. Despite the cost of revenue being relatively modest, the company operates at a loss, which is due to high operational costs and generally lower profit margins. Shareholder equity has also decreased YoY, with the company piling on more liabilities to help weather the 2022 bear market. Rising interest rates mean more expensive borrowing for Asana, which will continue to weigh on the company’s cash flow until the economy stabilizes and recession fears subside. The company has unveiled plans to reduce around 9% of its workforce to tackle some of the operational costs, which can be a net positive in the short term. However, whether such cost-cutting measures can get investors back on board remains to be seen.

Zoom Video Communications Inc (NASDAQ:ZM)

Zoom Video Communications, Inc. provides a unified communications platform with worldwide coverage. The company offers Zoom Meetings for content sharing through various devices, namely Zoom Phone, an enterprise cloud phone system, and Zoom Chat, which enables users to share messages, images, audio files, and content. The company also provides Zoom Rooms, a software-based conference room system. Zoom also offers a hardware-as-a-service to its corporate and individual customers. The company was incorporated in 2011 and is headquartered in San Jose, California.

Stock profile and performance

zoom stock.png

Another quintessential Covid stock, Zoom’s amazing growth was directly tied to the millions of employees, students, professors, and people of different lines of work communicating via video calls. This exploded the demand for video conferencing software and skyrocketed Zoom’s stock in the process. The stock reached firmly above $500 in October 2020 but has since fallen below $80. This fallout was largely due to the lifting of lockdown measures and fierce competition from the likes of Google and Microsoft, companies that launched their own video conferencing software. Increasing competition and limited growth opportunities prompted a mass sell-off since the start of 2022. While the company remains profitable, revenue growth has stagnated, which may be a recurring issue even after the global economy stabilizes. 

Zoom 2Q FY23 vs 2Q FY22


2Q FY23

2Q FY22

Revenue$1,099.5 mln$1,021.5 mln
Cost of revenue$273.6 mln$261.3 mln
Net Income$45.7 mln$317 mln
Diluted EPS0.151.04
Assets$8,047.6 mln$6,508.6 mln
Liabilities$2,057.2 mln$1,850.8 mln
Equity$5,990.4 mln$4,657.8 mln
Free Cash Flow$229.4 mln$455 mln

Zoom’s profit margins have been quite limited since the start of 2022. Rising operating expenses and stagnating revenue growth have hampered the stock's earnings-per-share figures. Share repurchasing initiatives and other cost-cutting measures have had little impact on the company’s stock. Analysts, such as Citi have slashed their price targets for Zoom and expect the stock to sink below $75 in the near future - citing worsening growth prospects and increased competition as the primary reasons. 

Elevated churn, a tough macroeconomic environment, and a general aversion to growth stocks have analysts and investors bracing for a tough FY2024 ahead for Zoom and its shareholders. 

Affirm Holdings Inc (NASDAQ:AFRM)

Affirm Holdings, Inc. operates a platform for digital and mobile-first commerce in the United States, Canada, and internationally. The company's platform includes POS payment solutions for consumers, merchant commerce solutions, and a consumer-focused app. Its commerce platform, agreements with originating banks, and capital markets partners enable consumers to pay for purchases over time with terms of between 1 and 60 months. Its merchants represent a range of industries, including consumer and luxury goods. Affirm Holdings, Inc. was founded in 2012 and is headquartered in San Francisco, California.

Stock profile and performance

affirm stock.png

Affirm picked up steam throughout the Covid-19 pandemic due to an increase in the demand for “buy now, pay later” shopping. This helped Affirm enter the spotlight and increased demand for its services helped launch it forwards. The stock price rose to over $160 in the latter half of 2021, which now trades at $15 per share. When consumers abuse the “buy now, pay later” business model, it can create a bubble for the company involved. Once the low-interest installments piled up, the increasing inflation figures in 2022 saw the Federal Reserve hike interest rates, which put heavy pressure on Affirm’s performance, thus, tanking the stock. 

Affirm 1Q FY23 vs 1Q FY22


1Q FY23

1Q FY22

Revenue$361.6 mln$269.4 mln
Cost of revenue$199.3 mln$103.2 mln
Net Income($251.3 mln)($652 mln)
Diluted EPS(0.86)(1.13)
Assets$7,165 mln$5,402.1 mln
Liabilities$4,601.6 mln$3,024.7 mln
Equity$2,563.4 mln$2,377.4 mln
Free Cash Flow$20 mln$348.8 mln

Affirm’s unprofitability becomes a glaring issue considering the difficulties associated with the company’s business model. While the financial results in 2022 do not seem so alarming when compared to YoY figures, attracting new customers with the same low-interest payments will no longer be an option for Affirm, as the Fed raises interest rates up to 4.00%. Some analysts even made parallels to the 2008 market crash - citing a deeply unsustainable business model and an over-leveraged consumer base. Albeit, BNPL securitizations are considerably lower than the subprime mortgage bonds were in 2008. While BNPL may not have the power to tank the entire financial market, investor squeamishness seems to be justified in the short term. 

Lightspeed Commerce Inc (NYSE:LSPD)

Lightspeed Commerce Inc. provides a commerce-enabling SaaS platform for small and midsize businesses, retailers, and restaurants in Canada, and internationally. Its SaaS platform enables customers to engage with consumers, manage operations, accept payments, etc. The company also offers tailored financial solutions, such as Lightspeed Analytics, Lightspeed Payments, and Lightspeed Capital, a merchant cash advance program. In addition, LSPD sells POS hardware terminals. Lightspeed Commerce Inc. was incorporated in 2005 and is headquartered in Montréal, Canada.

Stock profile and performance

lightspeed stock.png

Lightspeed Commerce saw considerable growth during the pandemic tech bubble, which popped in 2022 and erased billions of dollars in shareholder value. Lightspeed’s revenues depend on the volume of transactions on their platform, while net income depends on higher average revenue per user. Inflation has pressured consumer demand and the retail sector considerably, which has strained Lightspeed’s bottom line in 2022. 

At the peak of the pandemic, LSPD shares were trading above $100 - even reaching $125 in 2021. The stock is currently trading within the $15-20 range. 

Lightspeed Commerce 2Q FY23 vs 2Q FY22


1Q FY23

1Q FY22

Revenue$183.7 mln$133.2 mln
Cost of revenue$102.2 mln$68.3 mln
Net Income($79.9 mln)($59.1 mln)
Diluted EPS(0.53)(0.43)
Assets$3,552.6 mln$3,242.8 mln
Liabilities$209.2 mln$210.9
Equity$3,343.4 mln$3,031.9 mln
Free Cash Flow($47.3 mln)($15.3 mln)

While revenue growth is decent, the figures are still rather modest and Lightspeed Commerce remains unprofitable. Net loss has increased YoY, while free cash flow has decreased. On a more positive note, the company’s balance sheet shows very few liabilities, which means Lightspeed operates largely without the need for major borrowing. The company also has a decent cash reserve, which keeps investors hopeful of a turnaround once the markets stabilize. However, interest rate hikes have made sure that most investors shy away from growth-oriented tech stocks in the near future. Lightspeed’s volatility could continue well into 2023 and much will depend on the Federal Reserve’s policy on inflation in the coming months. 

Key takeaways from Covid stocks in 2022

High growth periods are followed by periods of stagnation and a gradual pullback. While all rational investors and traders are aware of this, the sheer degree of fallout experienced by some of the growth stocks in 2022 is not something to be taken lightly. With billions of dollars of shareholder value wiped out, rampant inflation, supply chain disruptions, and an ongoing armed conflict in Ukraine, the US stock markets have had a year to forget in 2022. 

While the decline of some investor favorites was truly severe, there may be a silver lining to this pullback - bringing the stock market back to tangible financial results and away from speculation-filled overvaluations. 

FAQs on Covid stocks in 2022

Did the stock market crash after Covid?

The US stock markets have seen a considerable decline from the pandemic highs in 2020-21. While a sudden crash has not occurred, rising inflation has shifted investor sentiment across the board, which has led to massive declines for high-tech growth stocks. 

What happened to Covid stocks in 2022?

Covid stocks have been on a steady decline since the start of 2022. The war in Ukraine and skyrocketing inflation prompted many investors to seek alternatives for their investments, which resulted in a gradual selloff in the stock market, with growth stocks bearing the brunt of the decline. 

Will Covid stocks go up in 2022?

With inflation and the war being ongoing issues, a stock market rally in 2022 is highly unlikely. However, interest rate hikes could regain the confidence of the public in tackling inflation - resulting in a slow, but steady rebound for the US stock markets.