WhyItDropped

Nasdaq · February 2, 2023

Before AI showed up in the numbers

+3.25%

single-day change vs previous close

Part of a longer stretch

The AI boom rally

early in it · 2022-12-28 → 2024-02-29, +57.56% over the whole period

What happened that day?

  • The Nasdaq rose 3.25% on the day
  • The day before, the Fed had cut its step to a quarter point, three notches down from the three-quarter-point moves it had been making
  • The Nasdaq reacted hardest because of its rate sensitivity. Technology shares priced on distant future profits move sharply on any hint that rates will fall
  • The Nasdaq had also fallen hardest in 2022. What falls most tends to recover most
  • Artificial intelligence would only be named as the reason for this advance months later. At this point the story was rates
  • The stretch ran to February 2024, with the Nasdaq gaining more than half its value

Sources

Every figure on this page is recomputed from the original daily closing prices and checked against them at build time. The account of what happened is written from the sources listed above.