The index fell more than 5% on Thursday to settle over 11% below last month's record high as policy concerns pressured tech valuations. Tuesday's election outcomes catalyzed the sell-off, heavily penalizing chipmaker stocks and sending the iShares Semiconductor ETF down by 12%. Although near-term trading often remains turbulent over the subsequent month, past performance shows consistent recoveries over broader timeframes. Over the past decade, the tech-heavy benchmark has typically mounted a significant rally within three to six months following correction bottoms.
Key points
Across 10 corrections over the past decade, the Nasdaq gained an average of 9.41% over th…: Across 10 corrections over the past decade, the Nasdaq gained an average of 9.41% over the following three months.
The index climbed an average of 17.03% six months after hitting correction bottoms, with…: The index climbed an average of 17.03% six months after hitting correction bottoms, with 2022 being the only exception.
Frank Cappelleri noted the index ended higher one year after midterms in 12 of the last 1…: Frank Cappelleri noted the index ended higher one year after midterms in 12 of the last 13 cycles since 1974.
Sources checked by our analysis pipeline: 1
The Nasdaq Composite plunged into correction territory on Thursday. History shows more selling can follow in the near term, but a recovery eventually takes hold three months later.
The tech-heavy index slid more than 5% on Thursday, closing more than 11% below its record reached last month. On Wall Street, any decline greater than 10% is a correction. A 20% pullback qualifies as a bear market.
Across 10 previous correction episodes over the last decade, selloffs in 2025, 2022, 2020 and 2018 were followed by further rough selling over the next one month. But the Nasdaq was back to rally mode again after six months for all those occasions except one: 2022.
Overall, the Nasdaq gained an average of 9.41% from the correction bottom over the following three months and 17.03% over six months.
The January 2022 correction was the one that offered a harsher outcome. The Nasdaq lost another 18.3% over the next six months and was down 24.3% a year later.
The catalyst for this correction was Democrats sweeping the House and Senate in Tuesday's midterm elections. The…
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