Nasdaq Plummets Over 5%, Historical Trends Indicate Subsequent Recovery

The Nasdaq Composite Index (IXIC) plummeted over 5% on Thursday, closing down more than 11% from the historical high set last month, entering a technical correction zone. Historical data shows that while the market may continue to face pressure in the short term after a correction, the Nasdaq has typically been able to gradually recover. Over the past decade, the Nasdaq has experienced 10 similar corrections, with further sell-offs occurring within a month after corrections in 2025, 2022, 2020, and 2018. Except for 2022, the Nasdaq re-entered a rising phase six months after these periods. Overall, the Nasdaq has averaged a 9.41% increase within three months after hitting a correction low and an average of 17.03% within six months. January 2022 was an exception, as the Nasdaq further declined by 18.3% within six months after the correction, with a cumulative drop of 24.3% a year later.

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