WhyItDropped

Nasdaq · June 13, 2022

The day three steps became certain

-4.68%

single-day change vs previous close

Part of a longer stretch

The 2021–22 tech bear market

midway through · 2021-11-19 → 2022-12-28, -36.40% over the whole period

What happened that day?

  • On 13 June 2022 the Nasdaq fell 4.68%
  • With May inflation at a forty-year high, a three-step Fed move became the base case
  • A change in the rate outlook moves the Nasdaq more, because its profits sit far out and the rate weighs heavily in the arithmetic
  • Around this time two-year Treasury yields also rose above ten-year yields, commonly read as a recession signal
  • Beating inflation means slowing the economy, and a slower economy means smaller profits. Either way it works against share prices
  • The Nasdaq finished the year down more than a third
  • In this stretch the index was 29.4% below its peak

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.