In today’s climate of market uncertainty, the greatest advice we can offer is simple: Invest in the NQ100. After two declining trading days.
Here’s why we believe this is the time to act, supported by key numbers, historical context, and lessons drawn from past tariff-induced corrections.
A Two-Day Correction: Numbers Tell the Story
Recent trading sessions have seen the NQ100 drop by approximately 4–5%—a steep plunge that has wiped out nearly $200 billion in equity value across the index. For many investors, this kind of pullback feels unnerving. However, such corrections are not uncommon in cyclical markets, especially when technical overextensions force profit-taking.
Recent Declines: Over the past two days, the index has retraced much of its extended rally. Data from leading market analytics show that the NQ100 has fallen to levels near or even below its 50-day moving average—a technical benchmark historically associated with oversold conditions.
Volume Surge: Trading volume has spiked significantly, indicating that many institutional investors are now stepping in rather than fleeing. Increased volumes during a correction often signal that the market is not panicking but rather realigning valuations.
Tariffs, Trade Wars, and Historical Context
Tariff concerns have long played a significant role in triggering market volatility. During the trade conflicts seen under the Trump administration, tariffs on steel, aluminum, and a wide range of imported goods sent shockwaves through global markets.
Historical Impact: For example, in 2018, U.S. tariffs sparked a wave of uncertainty that led to a roughly 6–8% decline in major tech indices. Despite the short-term pain, these tariff-induced corrections eventually paved the way for a strong recovery as companies restructured their supply chains and adjusted earnings forecasts.
Lessons from the Past: The Nasdaq-100, home to tech titans like Apple, Microsoft, and Amazon, has proven resilient in the aftermath of geopolitical disputes. When tariffs disrupted trade and dampened sentiment, the inherent strength of these companies eventually drove valuations back to—and even above—prior levels. Historical data from Bloomberg and Reuters confirms that markets typically overreact to tariff news, only to rebound once the initial shock subsides.
With current political rhetoric echoing similar themes and concerns about further tariff implementations, a temporary market overreaction appears to be underway. The same dynamics that drove market sell-offs during the 2018 trade war are in play today, offering a similar opportunity for disciplined investors.
Why Invest in the NQ100 Now?
- Attractive Valuations in an Oversold Market:
The steep decline has pushed the NQ100 into oversold territory. With valuations significantly lower than recent highs, this correction represents a discount that savvy investors can capitalize on. - Fundamental Strength Remains Untouched:
Despite current market jitters, the underlying companies in the Nasdaq-100 continue to exhibit robust fundamentals. These are industry leaders with strong balance sheets, innovative capabilities, and long-term growth potential that outshine temporary political or macroeconomic disturbances. Historical Recovery After Tariff Shocks:
As seen in past tariff-induced corrections, sharp sell-offs are frequently followed by rebounds. The market’s history suggests that once investor fear subsides and fundamentals reassert themselves, technology and growth stocks tend to recover rapidly, often outperforming expectations.Improved Technical Indicators:
The technical pullback—evidenced by the drop below key moving averages—often serves as a trigger for contrarian investors. High-volume buying in these conditions can be the precursor to a turnaround, as liquidity and renewed confidence push prices back upward.A Conducive Environment for Long-Term Investors:
For those with a long-term horizon, the current market conditions offer an excellent entry point. While short-term volatility may remain, the long-term trends supporting the tech sector and innovation have not fundamentally changed. Investing today is about buying quality at a discount.
Marginfall’s Final Take
The recent decline in the NQ100, driven by a mix of profit-taking, tariff uncertainties, and broader economic jitters, isn’t a sign of a market in freefall—it’s an opportunity. With nearly $200 billion in market value temporarily erased, history and technical indicators suggest that the recovery could be robust once investor sentiment shifts.
At Marginfall, we believe the greatest advice right now is to invest in the NQ100. The market is offering quality exposure to the world’s leading tech companies at a fraction of their previous valuations—a classic example of buying when there’s blood in the streets. For risk-tolerant, long-term investors, this could be one of the best entry points in recent years.
This has been yet another Marginfall. We don’t know tho.
