Nasdaq 100 In Bear Market Territory as U.S. Tariff War With China Heats Up

The Nasdaq 100 has officially entered a bear market, marking a significant point for investors as the index has fallen over 20% from its most recent peak. In less than two months, the NDX and IXIC indices have fallen more than 23%, with the futures during this morning's pre-market indicating more losses to come.

The QQQ ETF, which tracks the Nasdaq 100 is down 1.7% in the pre-market, as China respond to President Trump's latest hike with countermeasures of their own. U.S tariffs on China had stretched to 104% after the latest round of retaliation, only to see China this morning increase their tariff on U.S goods to 84%.

Since its inception in February 1971, the Nasdaq Composite has weathered nine bear markets, showcasing its resilience over the years. Historical data suggests that while bear markets can be challenging, they are not uncommon. For investors, history provides some assurance that markets have historically recovered over the long term, despite the fact that these current conditions are rather unprecedented.

It must be said, that most significant drawdowns, and bear markets are the result of unprecedented events, with the shock eventually giving way to revaluations and clarity.

During periods of heightened market volatility, anyone with a low risk profile may be best waiting for the dust to clear prior to making any major moves. Leading stocks such as Apple, (AAPL) Nvidia (NVDA), and Microsoft (MSFT) compose over a quarter of the Nasdaq-100 index, and each have been very badly hit owing to a range of factors.

The Mags ETF, a tracker of the Magnificent 7 group of stocks has seen a YTD decline of 25.22%. With the 0.79% move to the downside for the ETF during early trading today signals that the selling may not yet be done.