Stock Market Crash Hits Nasdaq as Index Falls 10.6%
The Nasdaq Composite has entered correction territory after falling 10.6% from its peak, while the S&P 500 and Dow Jones also retreat. The source says the…
The stock market crash hits the Nasdaq hardest among the three major U.S. indexes, with the Nasdaq Composite down 10.6% from its peak and now in correction territory. The S&P 500 has fallen 7.1% and the Dow Jones Industrial Average 8.4%, as investors weigh slower growth and surging oil prices linked to the U.S.-Iran war.
The declines leave investors assessing whether a correction could deepen or give way to a rebound. The source report points to a historical average gain for the Nasdaq after past corrections, but also warns that continued conflict and high oil prices could pressure the economy further.
The Nasdaq entered correction territory on March 26, when it closed more than 10% below its latest bull-market peak. The index had reached a record high of 23,958 on Oct. 29 and later fell to 21,408, according to the report, which links the slide to uncertainty over tariffs and rising oil prices.
That is a sharp pullback. Still, corrections have occurred repeatedly.
The Nasdaq Composite tracks more than 3,300 companies listed on the Nasdaq Exchange. Information technology and consumer discretionary stocks make up its largest sector exposures, and investors commonly use it as a benchmark for growth stocks.
The report says the index has fallen at least 10% from a record high a dozen times since 2011. Over the 12 months after its first close in correction territory, the Nasdaq returned an average of 22%, based on data from YCharts cited in the report. The index posted a positive return in 11 of the 12 cases.
Those historical results offer one reference point, not a forecast. The report calculates that a 22% advance would take the Nasdaq to 26,118 by March 26, 2027, if the index repeated its historical average. It also explicitly cautions that past performance does not guarantee future results.
The risks are tied in part to energy costs and economic uncertainty. The report says the U.S.-Iran war has pushed oil prices to a multiyear high, while tariff concerns have coincided with slower gross domestic product and jobs growth. Moody’s chief economist Mark Zandi believes a sustained conflict in the Middle East could push the U.S. economy into recession.
That matters beyond traders watching daily index moves. A prolonged drop in growth-oriented stocks can affect investment portfolios tied to broad market indexes, while a weaker economy and expensive oil could add pressure for businesses and households. The source does not quantify those effects, but identifies the conflict and oil prices as risks that could deepen the market’s decline.
The report also discusses the Invesco QQQ Trust, an exchange-traded fund that tracks the Nasdaq-100, a group of the 100 largest nonfinancial companies listed on the Nasdaq Stock Exchange. It says the fund returned 912%, or 16.6% annually, over the last 15 years, despite the Nasdaq Composite experiencing 12 corrections during that period.
That performance came with concentration risk. The fund’s five largest holdings account for nearly one-third of its performance, and its expense ratio is 0.18%. The report says shareholders pay $18 a year for every $10,000 invested. It argues that risk-tolerant investors with at least five years may consider a position, while advising them to set expectations lower than the fund’s past returns.
The Nasdaq’s next move will depend partly on whether oil prices stay elevated as the U.S.-Iran conflict continues. The report warns the index could fall further if those pressures persist.
Source: finance.yahoo.com
