The Nasdaq Composite (NASDAQINDEX: ^IXIC) is an index comprising about 3,500 stocks, many of which come from the technology and consumer discretionary sectors. To that end, the Nasdaq is often considered a benchmark for growth stocks because many of its components are on the cutting edge of various technologies and consumer trends, such as artificial intelligence, cloud computing, cybersecurity, and e-commerce.

Investors rotated away from growth stocks as post-pandemic inflation scorched the economy. The Nasdaq tumbled deep into bear market territory in 2022, falling as much as 36% from its high.

That drawdown was largely driven by recession fears arising from aggressive monetary policy. Specifically, the Federal Reserve has battled inflation by raising its benchmark interest rate at its fastest pace since the 1980s. Many economists feared (and some continue to fear) that policymakers could trigger a recession by tightening credit conditions too quickly.

Continue reading

Source Fool.com