The Nasdaq Composite index entered correction territory on Thursday, declining 5.52% to reach 24,315. This closing figure places the index approximately 12% below its record high set on October 6. The selloff was primarily driven by chip stocks following recent political shifts in major data center states.
Historical data indicates that in nine out of the last 10 correction cases, the Nasdaq traded higher six months later, with an average gain of 17.03%. However, performance varied, as seen in January 2022, when the index remained 18.32% lower after six months and 24.32% lower after a year.
The Federal Reserve's monetary policy remains a critical factor for market recovery. In September, the central bank raised the benchmark rate to a range of 3.75%–4.00%. While policymakers held rates in October, some officials advocated for a quarter-point increase.
Market expectations for a December rate hike have shifted. According to CME FedWatch, the probability of a hike dropped to 68.1% on Thursday from 82.7% the previous day. Investors are now awaiting the upcoming jobs report, which forecasts 65,000 new jobs and a 4.2% unemployment rate.
