The Nasdaq 100 is officially in correction mode.
The tech-heavy stock index dropped more than 1% on Friday to around 23,296, its lowest level in about five months. The index is down 10% from its all-time high of 26,119 in October, meeting the criteria for a standard stock correction.
Here’s where major indexes stood around 10:30 a.m. ET:
S&P 500: 6,418.68, down 0.9%
Dow Jones Industrial Average: 45,558.56, down 0.9% (-415.08 points)
Nasdaq 100: 23,291.19, down 1.25%
It’s been a tough year for equities in general, but particularly for tech stocks, which have lost some of their allure amid anxiety about continued capex spending and fears that the technology could ultimately hurt some businesses and the wider economy.
A sell-off in memory stocks, which were some of the highest-flying tech stocks earlier this year, has further dragged the index.
Selling pressure has intensified since the US and Israel began the war with Iran, which sent oil prices soaring. The fear is that higher crude prices could stoke inflation, which could dent growth at a time when the US economy is already slowing.
The losses in the stock market on Friday come amid a fresh jump in oil, with Brent crude spiking back above $110 a barrel despite Donald Trump’s announcement on Thursday that he would put off attacking Iran’s energy facilities for 10 days to allow for talks to end the war. Meanwhile, the Strait of Hormuz remains effectively closed, with reports on Friday stating that Chinese ships were turned away by Iran.
“The weekend approaches with war tensions mounting and investors shying from risk,” Joe Mazzola, a head trading and derivatives strategist at Charles Schwab, wrote in a note. “Major indexes are on pace for the fifth straight lower week, a streak last achieved during the miserable market year of 2022.”
The Nasdaq 100 now looks like it’s moving closer to the “elusive ‘Death Cross‘ territory,” Aaron Hill, the chief market analyst at FP Markets, wrote in a note, referring to the bearish technical signal where an asset’s 50-day moving average crosses its 200-day moving average, which has typically preceded more downside.
“For stocks to gain a footing, oil prices must drop,” he said of the outlook for stocks.
The Nasdaq is also on track for its 10th losing week in the last 11 weeks.
“That consistency to the downside has only been seen in a handful of other periods throughout the index’s history,” Paul Hickey, co-founder of Bespoke Investment Group, wrote in a note.