An Ominous Month Looms For Battered Nasdaq Bulls
The second half of August has been bruising for technology stocks, but those hoping for a respite from the declines shouldn’t relax just yet: September is just around the corner.
The month historically has been the worst of the year for returns, suggesting another reason for caution as investors also grapple with inflation and rising interest rates from the Federal Reserve. Over the last decade, the Nasdaq 100 Index has declined by an average of 0.6% during September, the only month of the year with a negative average. The tech-heavy index fell 5.7% in the Septembers of both 2020 and 2021.
Whether the month lives up to its reputation remains to be seen, but recent action has been to the downside. The Nasdaq 100 is down 4.7% in August, and has fallen 6.1% over the past three sessions, its biggest three-day drop since mid-June. Fed Chair Jerome Powell added to recent losses when he indicated the central bank is likely to keep raising interest rates.
“Between the Fed, inflation, and all the conflicting signals we’re getting about the economy, we’re entering the month in a precarious position,” said Ryan Detrick, chief market strategist at Carson Group Holdings.