Tech stocks continue to short circuit.
The Nasdaq 100 (^NDX) finished below its key 200-day moving average last week for the first time in nearly two years, according to data from Creative Planning chief markets strategist Charlie Bilello. The 200-day moving average is a technical measure of longer-term sentiment on an index or stock.
It marked the end of the second-longest uptrend in history for the Nasdaq 100 at 497 days. During this stretch, the Nasdaq 100 notched a 73% return.
The Nasdaq 100 contains the largest, most actively traded businesses listed on the Nasdaq stock exchange. It includes some of the biggest momentum names in tech, such as Palantir (PLTR), Nvidia (NVDA), Amazon (AMZN), Alphabet (GOOG), Intel (INTC), Microsoft (MSFT), Tesla (TSLA), and Apple (AAPL).
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It also includes consumer companies like Starbucks (SBUX) and Costco (COST).
Bilello’s work shows the longest run for the Nasdaq 100 above its 200-day moving average was 572 days from July 6, 2016, to Oct. 10, 2018. The return for this period tallied 58%.
The broader Nasdaq Composite entered into correction territory last week, defined as a decline of 10% or more from a recent high. The index closed the week down 3.6%, while the S&P 500 (^GSPC) recorded its worst weekly performance since September.
“We get a correction once every 12 months, and this time, it’s spurred by the tariffs,” Nancy Tengler of Tengler Investments told Yahoo Finance’s Seana Smith.
The market is going through a rough patch in March as investors digest a flurry of headlines related to tariffs.
Tariffs on China, Mexico, and Canada from the Trump administration could hurt corporate profits this year, experts say. Against such a backdrop, investors are selling higher-valued tech stocks and rotating into more defensive names in healthcare or companies that pay strong dividends.
Read more: What Trump’s tariffs mean for the economy and your wallet
For some former high-flying tech names, the sell-offs are becoming very pronounced.
Amazon, Alphabet, Microsoft, Nvidia, and Tesla are all 10% or more below their 52-week highs.
Nvidia’s market cap losses from its record high in January have reached $1 trillion. The losses have accelerated in the wake of a fourth quarter earnings report that investors deemed only so-so.
“We think investors have too benign of an interpretation of potential new policies and their impact on US earnings,” Trivariate Research founder Adam Parker said.
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