It was a brutal week for Nasdaq with the highest weekly drops in the past two years. Netflix plunged heavily following the earnings report. It was the third week of fall in a row for the S&P 500.
Nasdaq lately confirmed a correction is in the process as a soft decline was witnessed first in November 2021 and thereafter in continuation frequently. The current fall is 14.3 percent compared to a peak in November. It closed lowest since June.
The shares of Netflix dropped 21.8 percent due to weak subscriber growth. Similarly, the shares of rival streaming services declined significantly. Walt Disney dropped 6.9 percent and Roku fell 9.1 percent. Kingsview Investment Management portfolio manager Paul Nolte said Netflix acted as a catalyst in the poor performance of the tech-heavy index.
Meanwhile, the DJIA dropped 1.3 percent and S&P 500 fell by 1.89 percent. The Nasdaq Composite witnessed a decline of 2.72 percent. The S&P 500 declined 5.7 percent and the Dow fell 4.6 percent.
The stocks started roughly this year and there were various fundamental reasons to support including fear of the Federal Reserve becoming aggressive to control inflation and this has mostly hit the tech shares. Investors are focusing on the next step of the Fed. Moreover, consumer prices increased at a rapid pace in December. It was the largest yearly rise in a couple of decades.
The Nasdaq Composite and the S&P 500 recorded 1,029 and 24 new lows in the past 52 weeks period. Over 14 billion shares traded in the United States exchanges over the period of the past twenty sessions.
Meanwhile, Russias invasion of Ukraine has entered the third month and no sign of any positive peace talk is on the card. This is another reason for inflation to rise at a rapid pace in many European countries. The Western allies have imposed a ban on the import of Russian oil and gas.