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(NEW YORK) — Elon Musk has stayed silent on the results of a poll completed more than a day ago in which Twitter users voted for him to resign as the head of the platform. He pledged to abide by the outcome of the poll when he posted it.

Musk, who also runs electric vehicle maker Tesla, polled Twitter users Sunday night on whether he should step down as the leader of the social media platform.

The poll ended Monday morning, with 57.5% of voters saying he should step down and 42.5% saying he shouldn’t.

While remaining mum about the poll results since Monday morning, Musk has tweeted more than 10 times, including a criticism of Sen. Elizabeth Warren, D-Mass., over a public letter she wrote to Tesla Chairwoman Robyn Denholm expressing concern about his ability to effectively lead the carmaker and Twitter at the same time.

Musk said on Sunday, prior to the poll ending, that he has not selected a successor for the top position at the social media platform.

“No one wants the job who can actually keep Twitter alive,” Musk tweeted.

“As the saying goes, be careful what you wish, as you might get it,” he also tweeted Sunday, later adding, “Those who want power are the ones who least deserve it.”

The poll garnered nearly 15 million votes, roughly the same amount as a previous poll in which Musk asked users last month whether he should let former President Donald Trump back on the platform.

A user noted in a tweet that the poll regarding Musk’s leadership of Twitter received far fewer “likes” than the poll over Trump’s status, raising the possibility that bots played a larger role in the vote over Musk’s leadership. In response, Musk tweeted, “interesting.”

An individual also posted a message advocating that future polls over Twitter policy be restricted to users of the platform’s subscription service, Twitter Blue, which costs $8 month. “We actually have skin in the game,” the user said.Musk agreed, saying in reply, “Twitter will make that change.”

Since he acquired Twitter in October, Musk has posted a flurry of controversial messages that have drawn attention to the platform.

Last week, he posted a viral tweet that called for Dr. Anthony Fauci, the nation’s top expert on infectious disease, to be prosecuted. In early November, he called on voters to cast their ballot for Republican candidates for Congress in the upcoming midterm elections, using his company to forward a partisan political objective.

Musk, who said he overpaid for the platform at the purchasing price of $44 billion, faces pressure to boost the company’s revenue. Last month, he said that the company was losing $4 million a day.

The company relies almost entirely on advertising revenue, which depends on the number of users on the platform.

Before he acquired Twitter, Musk told reporters at the Met Gala in May that “he wants a much bigger percentage of the country to be on it, engaging in dialogue.”

Meanwhile, Musk prompted backlash from lawmakers and figures across the political spectrum in response to Twitter suspending the accounts of more than half a dozen journalists who cover Musk at The New York Times, The Washington Post and other prominent outlets.

The journalists were initially suspended on Thursday without warning but Musk later told reporters in a Twitter Spaces interview that the banned accounts had shared real-time location information, an apparent reference to accounts that track the planes of public figures, including Musk.

The suspensions came days after Twitter banned accounts that had shared publicly available information on plane travel. The company imposed a new rule on the same day prohibiting the spread of real-time location information on the platform, after a stalker allegedly followed a car carrying Musk’s son, Musk said.

The reporters’ accounts were later reinstated.

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(NEW YORK) — Cryptocurrency has always been volatile, says one economics expert who spoke with ABC News. But 2022 was a stomach-churning, roller-coaster ride for investors and major players in the market.

The prices of popular cryptocurrencies plummeted throughout 2022. Moreover, some cryptocurrency companies and their founders are facing bankruptcy and even the threat of imprisonment.

Here are some of the events that shook the cryptocurrency world to its core in 2022:

Bitcoin, other currencies plunge

Some experts, including David Yermack, a professor of finance at the New York University Stern School of Business, say crypto’s free fall started after investors began selling off digital assets in response to the Federal Reserve’s interest rate hikes. The market took a nosedive after Celsius Network — a former cryptocurrency lending company — announced it was pausing all withdrawals and transfers between accounts in order to “honor, over time, withdrawal obligations.”

A drop in the crypto market in the first half of a year is not unusual, Yermack told ABC News.

“Cryptocurrency has been volatile throughout its history and has experienced a large number of sharp rises and falls,” Yermack told ABC News.

What really affected the market, he said, was the collapse of TerraUSD, a payment platform for so-called stablecoins.

‘Stablecoins’ take a hit

Stablecoins are a form of digital currency backed by another form of currency like the U.S. dollar or a commodity like gold, according to experts who spoke with ABC News. They are designed to be less volatile than other forms of cryptocurrency. But some of the heaviest-traded stablecoins saw a massive drop in value in 2022.

The most notable hit was the collapse of the Luna token and its associated TerraUSD stablecoin, said Yermack.

TerraUSD’s price “fell from $116 in April to a fraction of a penny” and the company had a market cap of over $40 billion, according to an analysis by CNET.

Yermack summed up why this particular collapse contributed to the crypto market’s crash.

The “Luna token and the TerraUSD stablecoin [were] two assets that were promoted by the same issuer and were linked to one another by a trading algorithm. Many people on the Terra platform had taken out loans in the stablecoin and posted the Luna tokens as collateral. When Luna’s value began to drop in the context of the overall market decline, it impaired the collateral for many of the stablecoin loans. Many of the borrowers, in turn, couldn’t repay these loans because they had used the stablecoins to purchase other investments that had themselves dropped in value. The interconnections among all of these transactions amounted to a ‘death spiral’ that dragged down Luna and TerraUSD simultaneously and had negative effects on many investors’ portfolios,” he said.

Bill Starkov, an NFT and crypto entrepreneur and founder of Apocalyptic Apes, LLC, who is known online as Fity.eth, said Luna’s demise was inevitable.

“If you looked at Luna and you watched it and you understood what it does, it was very inflated. It was very high,” he told ABC News.

Layoffs, bankruptcies plagued some of the most successful crypto companies

This past year saw the downfall of FTX, one of the largest cryptocurrency exchange platforms.

After raising multibillion dollars from investors, according to a complaint filed by the U.S. Securities and Exchange Commission, FTX is in bankruptcy, and its 30-year-old founder, Sam Bankman-Fried, stands accused of defrauding investors and has since been arrested. Bankman-Fried faces numerous charges leveled by the U.S. Securities and Exchange Commission, which says FTX customer losses total $8 billion.

But FTX was not the only crypto company to crumble in 2022. BlockFi, a cryptocurrency lender, filed for Chapter 11 bankruptcy protection in November.

Kraken, another previously high-valued cryptocurrency exchange and bank, recently announced it was reducing its workforce by 30% to “adapt to current market conditions.”

Crypto outlook for 2023

Cryptocurrency has always been a risky investment, according to economist and stockbroker Peter Schiff.

“I don’t think they have any underlying value,” Schiff, who also hosts The Peter Schiff Show Podcast, said about digital currency.

“There’s no real wealth that’s being created out of crypto,” he said. “Money is just transferring from the people who buy it to the people who sell it. And it’s not even a zero-sum game. It’s a negative game, because there’s so much cost, you know, that’s involved in the process. But it’s unfortunate that so much capital has been wasted and so many companies have been formed around crypto and blockchain. It’s all a complete waste.”

According to Yermack, one shouldn’t confuse crypto for what happened to FTX.

“FTX is an offshore operation run by very inexperienced people who seem to have behaved very badly,” he explained. “The fact that they were trading crypto is a little bit beside the point. They could have been trading real estate or stocks and bonds, or whatever. They had no accounting, no internal controls, they were very irresponsible with the money that was entrusted to them by their customers. But that’s not to say that everyone behaves that way in the crypto universe.”

Starkov said FTX’s crisis is “unfortunate because a lot of people got hurt.” But despite a tumultuous year for cryptocurrency, he says people have made money with crypto and that will keep attracting investors.

“If you look at where people bought [cryptocurrency] in from, they’re still on profit,” he said. “If you bought ETH at $80, $90 or if you bought Bitcoin at $1,000 $2,000, you’re still sitting at $17,000.”

Volatility and uncertainty, he said, is not endemic to cryptocurrency.

“We have the same thing with the stock market. We have the same thing with the real estate market,” he added.

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(NEW YORK) — Sam Bankman-Fried, who is facing charges in the U.S. following the collapse of his cryptocurrency company, FTX, is willing to waive his right to deny extradition to the U.S., a lawyer for the disgraced cryptocurrency executive said Monday after a chaotic court hearing that did not go according to plan.

The lawyer expected Bankman-Fried to return to court at some point this week to make the decision official, at which time he would be flown to New York to face federal charges.

Bankman-Fried, 30, was arrested last week in the Bahamas after federal prosecutors in New York filed an eight-count indictment including allegations of fraud and conspiracy.

At a court hearing last week, Bankman-Fried declined to waive his right to challenge extradition to the U.S. However, multiple sources familiar with the matter told ABC News ahead of Monday’s hearing that Bankman-Fried had reversed his position and was prepared to waive extradition, setting up a move to custody in the U.S.

At a court hearing on Monday, however, Bankman-Fried did not waive his right to deny extradition as expected, instead asking to see a copy of the U.S. indictment and speak to his New York-based attorney. A phone call, in the presence of his Bahamian counsel, was approved by the judge.

Ultimately, Bankman-Fried agreed to waive extradition and clear the path for his transport to the U.S. for prosecution.

Bankman-Fried has been held in the medical ward of the island’s Fox Hill prison, after an application for bail was denied when a judge determined he was too much of a flight risk.

A U.S. government plane is waiting to fly Bankman-Fried back from the Bahamas, where he lived in a $30 million penthouse while running FTX until it collapsed in a $32 billion bankruptcy in November.

In addition to the criminal charges, Bankman-Fried faces related civil lawsuits from the Securities and Exchange Commission and the Commodity Futures Trading Commission.

There are more than $8 billion in customer losses, said Gretchen Lowe of the Commodity Futures Trading Commission, a federal agency.

Some crypto traders, who deposited their savings on the platform, fear they may never get their money back.

John Ray, the new CEO of FTX, who oversaw the dissolution of Enron, told members of the House last week that FTX lacked corporate controls to an extent he had never witnessed, characterizing the company’s conduct as “old-fashioned embezzlement.”

“I’ve never seen an utter lack of record keeping,” Ray said. “Absolutely no internal controls.”

Bankman-Fried, in an interview with ABC News’ George Stephanopoulos in November, denied knowing “there was any improper use of customer funds.”

“I really deeply wish that I had taken like a lot more responsibility for understanding what the details were of what was going on there,” Bankman-Fried told Stephanopoulos. “A lot of people got hurt, and that’s on me.”

ABC News’ Bill Hutchinson contributed to this report.

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(NEW YORK) — Sam Bankman-Fried, who is facing charges in the U.S. following the collapse of his cryptocurrency company, FTX, did not waive his right to an extradition hearing at a court appearance in the Bahamas on Monday as expected, casting uncertainty around his potential transport to the U.S. for prosecution.

Bankman-Fried said he wanted to see a copy of the U.S. indictment and speak to his New York-based attorney. A phone call, in the presence of his Bahamian counsel, was approved by the judge.

The proceedings were adjourned to an as-yet-unspecified date and Bankman-Fried was remanded back into custody.

Bankman-Fried, 30, was arrested last week in the Bahamas after federal prosecutors in New York filed an eight-count indictment including allegations of fraud and conspiracy.

Bankman-Fried has been held in the medical ward of the island’s Fox Hill prison, after an application for bail was denied when a judge determined he was too much of a flight risk.

At the outset of court hearings, Bankman-Fried declined to waive his right to challenge extradition to the U.S., but he had reversed his position and was prepared to waive extradition, setting up a move to custody in the U.S., multiple sources familiar with the matter previously told ABC News.

It is not immediately clear whether Bankman-Fried had another change of heart but a frustrated Bahamian prosecutor called Monday’s proceedings “incredible” and said Bankman-Fried’s local lawyer was not to be believed.

A U.S. government plane is waiting to fly Bankman-Fried back from the Bahamas, where he lived in a $30 million penthouse while running FTX until it collapsed in a $32 billion bankruptcy in November.

In addition to the criminal charges, Bankman-Fried faces related civil lawsuits from the Securities and Exchange Commission and the Commodity Futures Trading Commission.

There are more than $8 billion in customer losses, said Gretchen Lowe of the Commodity Futures Trading Commission, a federal agency.

Some crypto traders, who deposited their savings on the platform, fear they may never get their money back.

John Ray, the new CEO of FTX, who oversaw the dissolution of Enron, told members of the House last week that FTX lacked corporate controls to an extent he had never witnessed, characterizing the company’s conduct as “old-fashioned embezzlement.”

“I’ve never seen an utter lack of record keeping,” Ray said. “Absolutely no internal controls.”

Bankman-Fried, in an interview with ABC News’ George Stephanopoulos in November, denied knowing “there was any improper use of customer funds.”

“I really deeply wish that I had taken like a lot more responsibility for understanding what the details were of what was going on there,” Bankman-Fried told Stephanopoulos. “A lot of people got hurt, and that’s on me.”

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(NEW YORK) — Epic Games, the creator of Fortnite, agreed to pay about $520 million over allegations that it violated children’s privacy laws and used misleading gaming features that tricked customers into shelling out millions of dollars, the Federal Trade Commission said on Monday.

The settlement over privacy violations requires that Epic adopt robust default privacy settings for children and teens, guaranteeing that voice and text communications are turned off by default.

The agreement over misleading gaming practices mandates that Epic refund consumers $245 million, the largest refund amount in a gaming case in the FTC’s history.

In a statement, Epic confirmed the agreement.

“No developer creates a game with the intention of ending up here. The video game industry is a place of fast-moving innovation, where player expectations are high and new ideas are paramount,” the company said in the statement.

“Statutes written decades ago don’t specify how gaming ecosystems should operate,” the statement added. “The laws have not changed, but their application has evolved and long-standing industry practices are no longer enough.”

This is a developing story. Please check back for updates.

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(NEW YORK) — The results are in: Twitter users told CEO Elon Musk he should step down.

Musk polled Twitter users Sunday night on whether he should step down as head of the social media platform.

The poll ended Monday morning, with 57.5% of voters saying he should step down and 42.5% saying he shouldn’t.

“I will abide by the results of this poll,” Musk had pledged Sunday night.

“As the saying goes, be careful what you wish, as you might get it,” he also tweeted Sunday, later adding: “Those who want power are the ones who least deserve it.”

This is a developing story. Please check back for updates.

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(NEW YORK) — Sam Bankman-Fried, who is facing charges in the United States following the collapse of his cryptocurrency company, FTX, is prepared to waive extradition from the Bahamas during a court appearance that could occur as soon as Monday, multiple sources familiar with the matter told ABC News.

Federal prosecutors in New York charged Bankman-Fried, 30, in an eight-count indictment with stealing billions of dollars from FTX customers and investors and using it to pay off debts and expenses in his privately-held hedge fund, Alameda Research, and to buy lavish real estate and make $35 million in political donations.

A judge denied Bankman-Fried bail in the Bahamas, where he was arrested on Dec. 12, and has been held in the medical ward of the island’s Fox Hill prison.

Initially, Bankman-Fried declined to waive his right to challenge extradition to the U.S., but, according to the sources, the crypto executive is expected to reverse his position as soon as Monday if his bid to be released on bail is unsuccessful.

After federal charges against him were unsealed, defense attorney Mark Cohen said Bankman-Fried was reviewing the indictment and considering his options.

Reuters first reported Bankman-Fried would agree to extradition.

A U.S. government plane is waiting in the Bahamas to bring Bankman-Fried to New York, where he lived in a $30 million penthouse while running FTX until it collapsed in a $32 billion bankruptcy in November.

A source familiar with the charges told ABC News that Bankman-Fried is facing a multi-count fraud indictment. In addition to the criminal charges, Bankman-Fried faces related civil lawsuits from the Securities and Exchange Commission and the Commodity Futures Trading Commission.

Since the collapse of FTX, federal prosecutors in the Southern District of New York have been looking at Bankman-Fried, sources have told ABC News.

FTX was once a crypto darling, receiving endorsements from such celebrity athletes as Tom Brady, Naomi Osaka and Stephen Curry. The company filed for bankruptcy protection in November after a rival cryptocurrency exchange announced it was backing out of a plan to acquire it.

Bankman-Fried was arrested on the eve of his scheduled testimony before the House Financial Services Committee in a hearing titled “Investigating the Collapse of FTX, Part 1.”

Bankman-Fried, in an interview with ABC News’ George Stephanopoulos in November, denied knowing “there was any improper use of customer funds.”

“I really deeply wish that I had taken like a lot more responsibility for understanding what the details were of what was going on there,” Bankman-Fried told Stephanopoulos. “A lot of people got hurt, and that’s on me.”

ABC News’ Max Zahn contributed to this report.

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(NEW YORK) — Elon Musk prompted backlash from lawmakers and figures across the political spectrum overnight in response to Twitter suspending the accounts of more than half a dozen journalists who cover Musk at The New York Times, The Washington Post and other prominent outlets.

The journalists were initially suspended on Thursday without warning but Musk later told reporters in a Twitter Spaces interview that the banned accounts had shared real-time location information, an apparent reference to accounts that track the planes of the well-known, like Musk.

Rep. Lori Trahan, D-Mass., who serves on the House committee on electronic communications and the internet, voiced concern over the bans.

“My team met with [Twitter] today,” Trahan said on Thursday. “They told us that they’re not going to retaliate against independent journalists or researchers who publish criticisms of the platform.”

“Less than 12 hours later, multiple technology reporters have been suspended. What’s the deal, @elonmusk?” she added.

Rep. Alexandria Ocasio-Cortez, D-N.Y., who has 13.4 million followers on the platform and previously described threats on her life, sharply criticized the removal of journalists’ accounts.

“You’re a public figure. An extremely controversial and powerful one,” Ocasio-Cortez said. “I get feeling unsafe, but descending into abuse of power + erratically banning journalists only increases the intensity around you.”

“Take a beat and lay off the proto-fascism,” she added. “Maybe try putting down your phone.”

Twitter did not immediately respond to a request for comment.

The latest suspensions came days after Twitter banned accounts that had shared publicly available information on plane travel. The company imposed a new rule on the same day prohibiting the spread of real-time location information on the platform, after a stalker allegedly followed a car carrying Musk’s son, Musk said.

Musk posted a poll on his Twitter account on Thursday night asking followers whether the suspensions of journalist accounts should be lifted “now” or “in 7 days.” As of Friday morning, nearly three million people had voted, preferring that the ban be lifted immediately by a margin of 58% to 42%.

Vera Jourova, European Commission vice president, characterized the bans as “worrying” and said they violate measures recently enacted by the European Union that regulate content moderation procedures on social media platforms.

The Digital Services Act, an EU law that takes effect in 2023, slaps offenders with fines of up to 6% of global revenue.

“There are red lines,” Jourova said on Friday. “And sanctions, soon.”

The journalists suspended from the platform include The New York Times’ Ryan Mac, The Washington Post’s Drew Harwell and CNN’s Donie O’Sullivan, as well as independent journalists Keith Olbermann and Aaron Rupar, among others.

In a statement, CNN said: “The impulsive and unjustified suspension of a number of reporters, including CNN’s Donie O’Sullivan, is concerning but not surprising.”

“Twitter’s increasing instability and volatility should be of incredible concern for everyone who uses Twitter,” the statement added. “We have asked Twitter for an explanation, and we will reevaluate our relationship based on that response.”

Similarly, a spokesperson for the New York Times voiced disappointment over the bans.

“Last night’s suspension of the Twitter accounts of a number of prominent journalists, including The New York Times’s Ryan Mac, is questionable and unfortunate,” the spokesperson said.

“Neither The Times nor Ryan have received any explanation about why this occurred. We hope that all of the journalists’ accounts are reinstated and that Twitter provides a satisfying explanation for this action,” the spokesperson added.

The moves elicited criticism from prominent commentators across the political spectrum.

Ben Shapiro, a conservative pundit with 5.2 million followers on Twitter, opposed the bans, even as he sympathized with Musk’s safety fears and criticized some of the reporters who were subject to the bans.

Meanwhile, Will Cain, a conservative host of the Fox News program Fox and Friends, expressed disagreement with the ban of Rupar.

“I haven’t seen a compelling case for his suspension from Twitter,” Cain said.

Musk, a self-avowed defender of free speech who acquired Twitter in October, previously said that he would not ban the account tracking his flight activity.

“My commitment to free speech extends even to not banning the account following my plane, even though that is a direct personal safety risk,” he said on Twitter on Nov. 6.

Earlier this month, Musk framed previous content moderation at Twitter as censorship after he gave some journalists access to internal Twitter communications pertaining to the restriction of messages linking to a New York Post report about Hunter Biden, the son of President Joe Biden.

The journalists called an ensuing set of stories about the internal communications the Twitter Files.

Wesley Lowery, an independent journalist and a former reporter at the Washington Post, criticized Twitter’s suspension of accounts belonging to journalists as a restriction of speech that exceeded previous efforts revealed in the internal communications.

“The owner of twitter targeting and suspending reporters who shared accurate reporting about him is much more troubling and much more in violation of the spirit of twitter as a public square than anything exposed in the so-called #twitterfiles,” Lowery said.

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(NEW YORK) — A new NGO report released Thursday claims TikTok’s algorithm targets “vulnerable teens” and recommends “harmful” content to them, sometimes as rapidly as every 27 to 39 seconds.

The report, from the Center for Countering Digital Hate, defines harmful content as content about topics like eating disorders, weight-shaming, self-harm and sexual assault.

The center’s researchers conducted the study by signing up eight new accounts in the U.S., Canada, the U.K. and Australia, setting them to a minimum age of 13, and watching and liking videos that discussed body image and mental health. Half of the accounts had usernames with “loseweight” in them and were deemed “vulnerable” accounts by the researchers, while the other half were deemed “standard” accounts without a “loseweight” username.

“For each account, we recorded the first 30 minutes of algorithmically recommended content on each account’s ‘For You’ feed, watching and liking any videos about body image, mental health or eating disorders. The resulting recordings were analyzed to examine the frequency of recommendations for body image, mental health, selfharm and eating disorder content,” they noted.

According to the researchers’ findings, once the social media app’s algorithm kicked in, content about suicide surfaced on the “standard” accounts’ feed as early as 2.6 minutes in, and content about eating disorders popped up within 8 minutes. “Vulnerable” accounts, meanwhile, were recommended three times as many harmful videos and 12 times as many self-harm videos as the “standard” accounts.

“The harmful content TikTok recommended to the Vulnerable Teen Accounts was more extreme than content shown to the Standard Teen Accounts,” the researchers added. “An increase in videos about eating disorders was accompanied by an increase in self-harm and suicide content, which included thinspo, methods to self-harm, and videos of teens discussing plans to commit suicide.”

Imran Ahmed, CEO of the Center for Countering Digital Hate, called the results “every parent’s nightmare.”

When reached by ABC News’ Good Morning America, TikTok pushed back on the report, pointing out the study’s small sample size and argued researchers’ use of the app did not reflect users’ real-world behavior patterns and activities on TikTok.

“This activity and resulting experience does not reflect genuine behavior or viewing experiences of real people,” a TikTok spokesperson said in a statement. “We regularly consult with health experts, remove violations of our policies, and provide access to supportive resources for anyone in need. We’re mindful that triggering content is unique to each individual and remain focused on fostering a safe and comfortable space for everyone, including people who choose to share their recovery journeys or educate others on these important topics.”

The company reiterated that content about disordered eating and similar topics violates the app’s community guidelines and is taken down once identified by its keyword detection systems or flagged by community members or external partners to TikTok’s moderation team.

TikTok also said it worked with partners such as the National Eating Disorders Association to provide resources to users, for example, redirecting any searches for topics such as self harm or eating disorders to the 988 suicide and crisis phone and text lines or the NEDA phone and text lines.

TikTok has come under scrutiny in the past as it has grown into one of the most popular social media apps. Last December, mental health professionals spoke out when a trend had teen users attempting to diagnose themselves with mental disorders using TikTok, and earlier this spring, the National Institutes of Health launched research into how apps like TikTok could be linked to addiction and impact teenagers’ brains.

The Center for Countering Digital Hate called for more government regulation and accountability from social media companies in the report’s conclusion.

Earlier this year, Senate lawmakers introduced the Kids Online Safety Act, which would require social media companies to allow users more privacy options, the ability to disable addictive features and the ability to opt out of algorithmic recommendations. It would also require them to provide parents with tools to track app usage and limit app purchases, and would force companies to “prevent and mitigate the heightened risks of physical, emotional, developmental, or material harms to minors posed by materials on, or engagement with, the platform,” among other things.

The legislation has not yet passed out of committee or been brought to a vote.

The state of California also passed new legislation in August, called the California Age-Appropriate Design Code Act, requiring apps and websites to boost safety precautions for children specifically, and threatening them with fines if companies do not adhere to the law.

If you are experiencing suicidal thoughts, substance use or other mental health crises, please call or text the new three digit code at 988. You will reach a trained crisis counselor for free, 24 hours a day, seven days a week.

If you or someone you know is battling an eating disorder, contact the National Eating Disorders Association (NEDA) at 1-800-931-2237 or NationalEatingDisorders.org.

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(NEW YORK) — A devastating year for the stock market is hurtling toward its end, but not before December delivers a final verdict for investors.

After rallying in October and November, the S&P 500 fell for five consecutive days earlier this month. Each of the major indexes has dropped at least 1.5% in December, but an end-of-year surge known as the Santa Claus rally could end the year on a positive note.

The uncertain near-term outlook for the U.S. economy has amplified market volatility, as recession fears weigh on expectations for company earnings, analysts told ABC News. However, reason for long-term market optimism has emerged after a monthslong streak of declining inflation and an anticipated slowing of rate increases at the Federal Reserve, some analysts said.

“December for many is the hardest month to trade,” Ed Moya, a senior market analyst at broker OANDA, told ABC News. “This year, a lot of investors are unsure about the fate of the U.S. economy.”

Still, next year offers hope that a possible downturn will give way to a bounce back for stocks, Adam Turnquist, chief technical strategist at LPL Financial, told ABC News.

“While there is downside risk, overall things are looking more constructive for equities as we look ahead to 2023,” he said.

Here’s what you need to know about stock market performance in December, and what it says about the stock market going forward:

How stocks perform in December

In recent decades, the stock market has typically ended the year on the rise.

Since 1950, the S&P 500 has generated average returns of more than 1.5% in December, LPL Financial said in a report on Monday.

The losses so far this month shouldn’t necessarily deter investors, since the returns usually arrive in the second half of the month, the report said.

The Santa Clause Rally, a seven-day period at the end of December and beginning of January, has historically delivered stock market gains comparable to a strong month, the report added.

This time around, market performance will depend on investors’ reaction to the latest inflation data and the policy response from the Federal Reserve, analysts said.

A government report on Tuesday revealed that inflation stood at 7.1% last month compared with a year prior, continuing a months-long decline from a 40-year record reached over the summer.

However, inflation remains at a level more than triple the Fed’s target rate of 2%.

The inflation news nevertheless bolstered hopes among some investors that the U.S. could achieve a “soft landing,” in which inflation returns to normal levels while the economy averts a recession.

A day later, the Federal Reserve said it was raising its short-term borrowing rate another 0.5%, slowing an aggressive series of rate increases while continuing an effort to cool the economy and dial back inflation.

Borrowing cost increases usually weigh on stocks, since the moves aim to slash inflation by slowing the economy and choking demand. But the latest rate hike pulled the Fed back from three consecutive 0.75% increases, signaling confidence that the central bank can bring sky-high inflation down to normal levels.

Despite the positive sign, each of the major stock indexes fell nearly 1% on the news, in part because the Fed also signaled that it would not begin cutting rates until 2024.

The market outlook going into 2023

Analysts said they expect market volatility and a potential recession between now and the first half of next year. Still, some predicted that a strong finish to the year would buoy the economy and markets.

“There’s potential for markets to gyrate up or down quite a bit,” Dave Sekera, chief U.S. market strategist at Morningstar, told ABC News.

“Our U.S. economics team does believe if there is a recession, it will be short and shallow,” he added. “In our outlook for the second half of 2023, we do think the economy will rebound.”

Moya, of OANDA, said persistent volatility stems from a host of factors, such as the zero-COVID policy in China, the movement of inflation and the possibility of a recession.

“We’re probably going to see more choppy conditions,” he said. “This is a difficult economy to get excited about.”

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