Down 10% from its peak reached earlier this year, the technology-laden Nasdaq Composite Index has fallen into correction territory.
The Nasdaq declined 2.4% to 12,821.22 on Oct. 25 and is down 11% from its high of 14,358.02 set on July 19 of this year. The Nasdaq is now down 20% from its record high of 16,057.44 reached on Nov. 19, 2021.
The current slump comes as a series of third-quarter earnings results from big technology companies failed to reassure traders and investors who are nervous about rising bond yields.
Technology stocks have been particularly hard hit as long-term Treasury yields continue to rise amid a selloff in the bond market. The benchmark 10-year Treasury yield is currently at 4.951%.
Big tech earnings began on Oct. 24 with prints from Alphabet (GOOGL) and Microsoft (MSFT). While Microsoft’s Q3 results were strong, Alphabet’s cloud-computing revenue came in soft, sending the company’s stock down 10% and dragging the Nasdaq lower with it.
A stock market correction is generally defined as a decline of 10% or more from recent highs. A bear market is usually defined as a decline of 20% or more from peak levels.
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