Nasdaq is positioned for the worst month of January in 50 years

Nasdaq positions itself for the worst month of January in its 50th year

The Nasdaq Composite Index is heading for the worst start of the year in half a century since aggressive Federal Reserve interest rate plans shook fast-moving technology stocks.

The technology index fell 12% in January to close on Friday, worse than the 10% drop in 2008 when the global financial crisis shook markets around the world. The sell-off comes amid a jump in US bond yields, hurting more expensive technology stocks that are valued against future growth expectations.

The Composite Index rose 0.8% on Monday, adding to Friday’s gains as falling gains helped reduce the Fed’s impact somewhat. But even if the index rises another 1%, it will still be on the way to the grim cornerstone.

And strategists say it may be too early to say that the worst is over. For Morgan Stanley’s Michael J. Wilson, volatility and fluctuations throughout the day are like “classic bear market action.” Indeed, futures trading was a common sight last week with movements of four plus percentage points on average, as nervous investors in stocks searched for the bottom after one of the most brutal sales of March 2020.

Moreover, Bank of America Corp. stressed on Friday that 2,648 of Nasdaq’s 3,682 shares are now in the bear market and nearly half of them have fallen more than 50% from their 52-week highs.