WhyItDropped

Nasdaq · September 13, 2022

The Inflation Print

-5.16%

single-day change vs previous close

Part of a longer stretch

The 2021–22 tech bear market

near the end of it · 2021-11-19 → 2022-12-28, -36.40% over the whole period

What happened that day?

  • 13 September 2022 — Nasdaq Composite fell 5.16%, right after a US consumer price release came in above expectations
  • The market had one question that year: when would inflation turn?
  • If it did, the Fed would stop raising rates, and if it stopped, share prices could rise
  • This release denied that. If inflation was more persistent than assumed, rates would go higher and stay there longer
  • Higher rates reduce the present value of future profits, and the effect is largest for companies whose value rests on expected growth
  • Fell 22.2% from peak. Declines in this period were driven not by events but by shifts in the rate outlook

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.