Wall Street suffered its worst performance in 14 years, while European stock markets closed with losses on Friday as exchanges there recorded their worst annual performance since 2018.

The Dow Jones Industrial Average fell 304 points, or 0.92%, to close Friday at 32,915. The blue chip index fell 8.6% since the beginning of this year.

The S&P 500 declined 41 points, or 1.07%, to finish the last trading day of the year at 3,808. It was down 19.2% for the year.

The Nasdaq decreased almost 118 points, or 1.13%, to end Friday at 10,359. The tech-heavy index dove 33% since the start of 2022.

Record inflation and aggressive monetary tightening by the U.S. Federal Reserve led to high volatility and heightened uncertainty by investors, which led to a bear U.S. stock market in 2022.

The VIX volatility index, also known as the fear index, rose 3.6% to 22.22 at Friday's early close due to the last trading day before New Year's Eve.

The 10-year U.S. Treasury yield increased 1.3% to 3.884%.

The dollar index fell 0.4% to 103.42, while the euro added 0.4% to $1.0703 against the greenback on Friday.

Precious metals were mixed, with the price of gold rising 0.3% to $1,820 per ounce but silver retreating 0.5% to $23.79 an ounce.

Crude oil prices were in positive territory with gains of over 1%. Global benchmark Brent crude was up 1.6% to $84.78 per barrel. U.S. benchmark West Texas Intermediate crude was around $79.41-up 1.3%.

Meanwhile, in Europe, the STOXX Europe 600, which includes around 90% of the market capitalization of the European market in 17 countries, was down 5.46 points, or 1.27%, to 424.89. It lost more than 12% since the beginning of this year.

The U.K.'s FTSE 100 decreased almost 61 points, or 0.81%, to end the last trading day of the year at 7,451. It fell 1.2% since the start of 2022.

Germany's DAX 30 lost 148 points, or 1.05%, to end the session at 13,983. France's CAC 40 was the worst performer of the day by plummeting 99 points, or 1.52%, to finish at 6,473. They posted losses of 12.5% and 9.5%, respectively, this year.

Italy's FTSE MIB declined 349 points, or 1.45%, to finish Friday at 23,706. Spain's IBEX 35 decreased 89 points, or 1.07%, to close at 8,229.

The indexes had their worst performance in four years as Russia's ongoing war on Ukraine, high inflation, and monetary tightening by central banks hammered investors' appetite and lowered the amount of liquidity in the markets and for new investments.