The past week saw a significant tech sell-off and the failure of the much-hyped “rotation” into small-cap stocks. The S&P 500, Nasdaq composite, Nasdaq 100, and Magnificent 7 all experienced losses. The Russell 2000 initially surged due to the rotation but ended the week only slightly higher than it was in February 2021. The Mag 7 collectively lost $1.32 trillion in market capitalization, with individual stocks like Nvidia experiencing significant declines.
While some of the Mag 7 have seen gains over the past 12 months, the overall trend has been downward in recent weeks. Small-cap stocks also took a hit after initial gains, with the Russell 2000 returning to its previous levels. The Nasdaq 100 index and S&P 500 have also experienced losses, albeit less severe.
These market fluctuations have caused anxiety among investors, with concerns about the sustainability of the gains made in recent months. The overall sentiment is one of uncertainty as investors navigate the volatility of the current market climate.
Vocabulary List:
- Sell-off /ˈsɛlˌɔf/ (noun): A sudden drop in the price of an asset typically accompanied by heavy trading volume.
- Fluctuations /ˌflʌk.tʃuˈeɪ.ʃənz/ (noun): Variations or changes in level or amount often referring to prices or rates.
- Capitalization /ˌkæp.ɪ.təl.ɪˈzeɪ.ʃən/ (noun): The total amount of a company’s outstanding shares multiplied by the current market price of its stock.
- Sustainability /səˌsteɪ.nəˈbɪl.ɪ.ti/ (noun): The ability to maintain or continue a process without interruption or decline.
- Anxiety /æŋˈzaɪ.ə.ti/ (noun): A feeling of worry nervousness or unease about something with an uncertain outcome.
- Volatility /ˌvɒl.əˈtɪl.ɪ.ti/ (noun): The quality of being subject to rapid or unexpected change especially regarding price.
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