The Nasdaq Composite index fell 2.4% on Friday, extending recent declines to fall 10% below its record high, confirming it is in correction territory. Concerns over tech earnings and a slowing U.S. economy have weighed on the tech-heavy index.
A softer-than-expected jobs report fueled fears that the Federal Reserve might need to implement significant interest rate cuts at its next meeting to avoid a recession. Disappointing earnings from Amazon (AMZN.O) and Intel (INTC.O) further spooked investors. The Nasdaq has dropped 10% from its July 10 record close of 18,647.45 points.
“This is an old-fashioned correction,” said Tom Plumb, CEO of Plumb Funds. “We’ve shifted from growth perception to needing government intervention with lower interest rates.”
Despite the drop, the Nasdaq is up 11.8% year-to-date, while the S&P 500 is up 12.1%. The correction comes amid investor wariness of high-valued tech stocks and seasonal volatility, with September and October historically being rocky for U.S. shares.