[New York Stock Market] Nasdaq Falls Another 2.72% in 'Correction Phase'... Worst Week Since Pandemic

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] Concerns over early tightening persisted, leading the three major U.S. stock indices in New York to close lower on the 21st (local time). The tech-heavy Nasdaq index fell more than 7% this week alone, marking its worst week since 2020. Investors ahead of this year's first Federal Open Market Committee (FOMC) meeting could not shake off fears about early tightening.

On this day in the New York stock market, the Nasdaq index closed at 13,768.92, down 2.72% from the previous session. Earlier, the index had fallen more than 10% from its November high last year, entering a technical correction phase. The Dow Jones Industrial Average closed at 34,265.37, down 1.30%. The S&P 500 index dropped 1.89% to 4,397.94. The Russell 2000, which mainly consists of small-cap stocks, also declined 1.78% from the previous session.

On a weekly basis, the New York stock market retreated for the third consecutive week. Economic media CNBC reported, "The Nasdaq index fell more than 2% again today, plunging deeper into correction." The Wall Street Journal (WSJ) described it as "the worst week since March 2020, when the COVID-19 pandemic terrified investors worldwide." This week, the Nasdaq index fell 7.55%. The S&P 500 and Dow indices closed down 5.75% and 4.6%, respectively.

By individual stocks, the world's largest online video streaming service (OTT) company Netflix saw its stock price fall more than 20%. This was a repercussion of the confirmed slowdown in subscriber growth in its Q4 earnings report. Disney, which operates the competing OTT Disney Plus (+), also saw its stock price drop 6.9%.

Leading tech stocks such as Tesla (-5.26%), Amazon (-5.95%), Apple (-1.28%), and Nvidia (-3.21%) continued their downward trend on the day. Following Netflix, Apple and Tesla are scheduled to announce earnings next week. Unlike the tech sector's weakness, essential consumer goods companies like Procter & Gamble showed resilience. Peloton, which plunged 23.9% the previous day due to a temporary halt in fitness product production, partially recovered losses with an 11.7% rebound on this day.

The recent weakness in the New York stock market is attributed to concerns over early tightening and the surge in Treasury yields. The U.S. 10-year Treasury yield briefly soared to the 1.9% range this week amid expectations that the Federal Reserve (Fed) would accelerate its tightening timeline beyond initial forecasts, before falling back to the 1.7% range on this day.

Reflecting market concerns, the Chicago Board Options Exchange (CBOE) Volatility Index (VIX), known as Wall Street's fear gauge, jumped 3.50 points (13.56%) to 29.06 compared to the previous session. Jonathan Golub of Credit Suisse commented, "The Fed is saying 'zero interest rates are no longer an option,'" calling it "a sign that a major change is coming." Investors are closely watching the upcoming FOMC regular meeting scheduled for the 25th-26th.

Oil prices declined. On this day at the New York Mercantile Exchange, March West Texas Intermediate (WTI) crude oil prices closed at $85.14 per barrel, down $0.41 (0.48%) from the previous session. Despite geopolitical risks pushing prices to a seven-year high and an upward trend this week, prices fell on this day. However, on a weekly basis, prices continued their five-week consecutive rise.