The Nasdaq Composite index is close to entering correction territory after falling 9% below its record high set in December. This marks a significant decline compared to its peers, with the S&P 500 down 4.8% and the Dow Jones Industrial Average off 4.2%. Several factors contribute to the Nasdaq’s lagging performance.
A heavy tech focus is one reason, as global trade tensions rise. The US has imposed tariffs on Chinese imports, Canadian products, and Mexican goods, prompting retaliatory measures from China, Canada, and Mexico. Companies like Apple, which relies heavily on Chinese components, are particularly affected.
Additionally, the struggling “Magnificent Seven” – Nvidia, Tesla, Microsoft, Apple, and Amazon – have seen significant declines in 2024, with Nvidia down 15% year to date and Tesla off nearly 30%. This is largely due to concerns over tariffs’ impact on US growth and investors booking gains from last year’s top performers. The Nasdaq’s decline is poised to continue, with stock futures pointing to a lower open, bringing it closer to correction territory.
Source: https://www.cnbc.com/2025/03/04/nasdaq-teeters-near-correction-territory-down-nearly-10percent-from-record.html