Nasdaq Plummets as Tech Earnings and Economic Worries Intensify

The Nasdaq Composite index fell into correction territory, dropping 10% below its record high due to disappointing tech earnings from Amazon and Intel, and fears over a slowing U.S. economy. The Federal Reserve may need to cut interest rates to prevent a recession, spooking investors further.

The Nasdaq Composite index nosedived on Friday, falling 10% below its record high and confirming its entry into correction territory. This drop was driven by lackluster tech earnings from Amazon and Intel, along with anxieties surrounding a slowing U.S. economy.

The softer-than-expected jobs report has amplified concerns over whether the Federal Reserve will need to implement significant interest rate cuts at its next meeting to stave off a potential recession. "This is an old-fashioned correction going on," commented Tom Plumb, CEO of Plumb Funds.

In the last 44 years, the Nasdaq has entered correction territory 24 times, based on Reuters' analysis of LSEG data. Historically, two-thirds of the time, the index has traded higher a month after entering correction territory. Currently, stocks are navigating through a traditionally volatile period, with September and October often exhibiting significant market swings.

(With inputs from agencies.)