The Nasdaq (QQQ) Composite Index has a good chance of entering a correction. The QQQ ETF is down by 6.96% from its 52-week high. It fell by 5.52% in the last week. It enters a technical correction when it declines by 10% or more.
Today marks the 39th anniversary of “Black Monday.” On that date in 1987, the Dow Jones fell 22.6% in a single day. Still, markets staged massive daily rallies in October. For example, the S&P 500 (IVV) gained 12.53% on October 30, 1929.
High oil prices raised inflation levels. Both the Consumer Price Index and the Producer Price Index rose in September. They will keep climbing so long as Iran controls traffic in the Strait of Hormuz.
The Iran Regime wants to elevate oil prices. That way, it hurts the Republican Party at next month’s mid-term elections. As a result, expect the correction in beaten-up names to continue. Last week, CoreWeave (CRWV) lost 25.21% to close just 3% above its yearly low. Bears hold a 17% short float. They are betting that the $50 billion debt load is not sustainable.
Nebius (NBIS), a peer neocloud stock, also dropped by 25%.
In the software sector, Twilio (TWLO) dropped by 15.6% last week. Conversely, investors bid up shares of Autodesk (ADSK), Salesforce (CRM), and Adobe Systems (ADBE).
After the mid-term, stock market volatility might ease. That would put an end to the Nasdaq correction risks.
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