{"id":76873,"date":"2023-10-25T23:45:46","date_gmt":"2023-10-26T03:45:46","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/the-nasdaq-just-fell-into-a-correction-now-what\/"},"modified":"2023-10-25T23:45:49","modified_gmt":"2023-10-26T03:45:49","slug":"the-nasdaq-just-fell-into-a-correction-now-what","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=76873","title":{"rendered":"The Nasdaq just fell into a correction. Now what?"},"content":{"rendered":"
\n

The Nasdaq Composite Index fell into its 70th correction in history on Wednesday, as surging long-term Treasury yields increased borrowing costs and weighed on stocks.<\/p>\n

The interest rate sensitive Nasdaq
\n COMP
\n barreled higher in the year\u2019s first half, in part on optimism about a potential Federal Reserve pivot away from rate hikes to fight inflation, but stocks have been under fire in recent months as the Fed dialed up its message that interest rates could will stay higher for longer.<\/p>\n

\n

The tech-heavy equity index fell 2.4% on Wednesday to close below the 12,922.216 threshold, marking a drop of a least 10% from its prior peak, which was set in mid-July at 14,358.02, according to Dow Jones Market Data. <\/p>\n

That met the common definition for a correction in an asset\u2019s value and is the Nasdaq\u2019s 70th close in correction territory since the index\u2019s inception in February 1971.<\/p>\n

Robert Pavlik, senior portfolio manager at Dakota Wealth Management, said the sharp rise in long-term Treasury yields has spooked investors, especially those in highflying, high-growth technology stocks where rising rates can be particularly corrosive.<\/p>\n

Pavlik likened the dynamic to the spending power of a lottery winner hitting a jackpot when rates are at 2% versus someone who wins when rates are closer to 10%. <\/p>\n

He also expects the 10-year Treasury yield
\n BX:TMUBMUSD10Y,<\/span>
\n which rose to 4.952% Wednesday, to top out at 5.25% to 5.5% and likely complicate any recovery for the Nasdaq.<\/p>\n

In the past 20 corrections for the Nasdaq, it took an average of three months for performance to improve, with index then gaining 14.4% on average a year later, according to Dow Jones Industrial Average.<\/p>\n

<\/p>\n

<\/p>\n

<\/p>\n<\/figure><\/div>\n

The damage on Wednesday was most acute in shares of highflying technology stocks, including Alphabet Inc.
\n GOOG,
\n -9.60%<\/bg-quote>
\n as shares skid 9.5%, after it reported earnings that were overshadowed by downbeat performance for its Google Cloud business. Spillover also hit shares of rival cloud computing giant Amazon.com Inc.,
\n AMZN,
\n -5.58%<\/bg-quote>
\n with its shares slumping 5.6%<\/p>\n

\u201cYou\u2019re feeling the pressure in some big-name stocks,\u201d Pavlik said. \u201cBut this too will, at some point, end. But concerns about the Fed are still in the forefront of everybody\u2019s minds.\u201d<\/p>\n

The Nasdaq was still up 22.5% on the year through Wednesday, while the Dow Jones Industrial Average
\n DJIA
\n was down 0.3% and the S&P 500 index
\n SPX
\n was up 9% in 2023, according to FactSet.<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The Nasdaq Composite Index fell into its 70th correction in history on Wednesday, as surging long-term Treasury yields increased borrowing costs and weighed on stocks. The interest rate sensitive Nasdaq COMP barreled higher in the year\u2019s first half, in part on optimism about a potential Federal Reserve pivot away from rate hikes to fight inflation, […]<\/p>\n","protected":false},"author":1,"featured_media":76874,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-76873","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-markets","tag-featured","post_format-post-format-gallery"],"yoast_head":"\nThe Nasdaq just fell into a correction. 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