Stocks fall into dreaded “correction”
Tech giants Apple, Amazon, Meta, and Telsa pulled the blue chips lower.
The stock market skidded to a stop Thursday with the S&P 500 index down 1.4%, confirming that the market has entered a good old-fashioned “correction.”
A turndown in Big Tech was the key culprit today, with the Nasdaq 100 off by 1.9%. Because of their massive size, Apple, Amazon, Meta, and Tesla are some of the key contributors to the slide in the market-cap-weighted S&P 500.
But in pure percentage terms, serious sell-offs in Adobe, Live Nation, Super Micro, and Palantir are the biggest party poopers.
Cognoscenti of corrections know, of course, that it’s merely Wall Street’s term of art for a decline of 10% from a previous peak, the somewhat arbitrary line people use to differentiate between a garden variety downturn and something slightly more serious.
It’s not necessarily an omen dooming us to a bear market or an economic downturn.
For instance, the last time the market corrected, between July and October of 2023, it proved to be momentary pitstop — likely generated by uncertainty related to the October 7 attacks on Israel and the war in Gaza.
The correction prior to that, which occurred between January and February 2022, on the other hand, did prove to be the opening chapter of pretty gnarly bear market that bottomed out with a more than 25% decline in October 2022.
As for this time, it’s anybody’s guess. Time will tell.
