WhyItDropped

Nasdaq · June 5, 2001

Waiting for the next cut

+3.61%

single-day change vs previous close

Part of a longer stretch

A summer slide and a September shock

early in it · 2001-05-22 → 2001-09-21, -38.49% over the whole period

What happened that day?

  • 5 June 2001 — the Nasdaq rose 3.61%. No single cause for that one day could be pinned down
  • The Fed had cut at every meeting since January, and the sense that another was near supported prices
  • Through this stretch the Nasdaq jumped whenever expectations of a cut appeared
  • Earnings kept deteriorating anyway. With too much equipment already installed, cheaper money buys nothing new
  • The bounce did not carry. The episode low came on 21 September, 46.59% below the February high
  • Repeated big up-days inside the fall are the signature of this decline

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 put together from the public record; where a specific source was consulted it is listed above.