The Nasdaq Composite Index declined nearly 10% from its recent high on Thursday, a move commonly defined as market correction, reflecting a decline from the highs for technology stocks as bond yields rise.
The technology-laden Nasdaq Composite COMP,
was 8.5% lower on Thursday morning after seeing a February 12 high of 14,095.47.
The last time the Nasdaq Composite fell into a correction, defined as a drop from a recent high of at least 10%, but not more than 20%, was in early September last year.
On Wednesday, the index saw the sharpest two-day slide since September 8th.
The slump in the Nasdaq reflects a rise in government debt benchmarks that may make technological burdens less attractive compared to fixed-income investments and other stock market sectors that did not perform as well as the economy began to recover has. the COVID pandemic. Technical equities are particularly sensitive to rising bonds, as their value rests heavily on growth in future earnings, which are discounted deeper as bond yields rise.
Investors risk additional fiscal stimulus from Congress will boost economic recovery in the US, but also increase inflation and force the Federal Reserve to raise interest rates sooner than they would prefer – a common non-technological environment not.