Nasdaq Composite Confirms Correction

The tech-heavy Nasdaq Composite fell more than 10% from its recent high, entering correction territory on Friday. The index dropped 2.4% and 4.7% over the last two trading sessions, closing at 16,776.16.

Nasdaq-100 Also in Correction

The Nasdaq-100, which is more concentrated in megacap tech stocks, also fell over 10% from its recent high, ending at 18,440.84. The correction level for the Nasdaq-100 was at 18,607.84.

3. Soft July Jobs Report Fuels Recession Fears

Friday's stock market pullback followed a softer-than-expected July jobs report, which prompted fears of a potential hard landing or outright recession. Investors are now awaiting the start of a rate-cutting cycle by the Federal Reserve.

4. Tech Stocks Lead the Decline

Tech stocks, which have been leading the rally for U.S. equities, faced pressure in July as investors rotated into other sectors of the market, including small-caps. Stocks saw widespread losses on Friday, with the Dow Jones Industrial Average slumping over 600 points, or 1.5%, while the S&P 500 dropped 2.1%.

5. Nasdaq's Correction History

The Nasdaq Composite has fallen into a correction 71 times in its history, including Friday. Of the 70 previous corrections, 27 of them continued to fall 20% or more from the recent high, or 38.6% of the time.

Recession Fears Mounting

Investors are increasingly concerned about the possibility of a recession as the U.S. economy shows signs of slowing down. The weak July jobs report, along with disappointing earnings from major corporations like Intel and Amazon, have added to these concerns.

7. Fed's Policy Mistake

Some analysts believe the Federal Reserve has made a policy mistake by not cutting interest rates sooner. They argue that there is no time left, and traders and investors are now worried about recession fears.

8. Global Stock Markets Affected

The plunge in U.S. stocks has had a ripple effect on global stock markets, which are experiencing heightened anxiety following the recent U.S. data that indicated a slowdown in manufacturing.

9. Nasdaq's Previous Correction

The Nasdaq Composite last entered correction territory on October 25, 2023, just as stocks were bottoming and before a tech-led rally that saw the index surge, setting a series of all-time highs.

10. Investors Await Fed's Next Move

As the U.S. economy shows signs of slowing down, investors are closely watching the Federal Reserve's next move. Many are hoping for a rate-cutting cycle to help stimulate the economy and ease recession fears. Share Rewrite