Nasdaq correction: history shows recoveries usually follow within six months

The Nasdaq Composite fell into correction territory Thursday, closing more than 11% below its record high after a 5% drop, with history showing further near-term selling is possible before a recovery typically takes hold. Across 10 correction episodes in the last decade, selloffs in 2025, 2022, 2020, and 2018 were followed by more rough trading over the next month, but the index rallied within six months in all cases except 2022. On average, the Nasdaq gained 9.41% three months after a correction bottom and 17.03% after six months. The current correction was triggered by Democrats sweeping Congress in Tuesday's midterm elections, with investors weighing tighter state-level restrictions on data centers. Chip stocks tumbled, with the iShares Semiconductor ETF falling 12%, its worst day since March 2020.