And valuations were already higher for many US stocks than for their peers around the world. That’s bad news for businesses which are expected to enjoy high levels of growth long into the future.īack at the start of the year, two other factors argued against a strong performance by the US’s leading growth shares.Īnalysts’ expectations for corporate earnings were already falling as the impact of tighter financial conditions started to be priced into forecasts. They slash the value in today’s money of tomorrow’s profits. Rising interest rates are particularly problematic for the kinds of growth-focused companies that Nasdaq specialises in. But no-one was predicting the rally we have seen year to date. The Nasdaq index bore the brunt of last year’s slump as interest rates rose more quickly than expected. It was not unreasonable to expect a rebound after the terrible performance by the US stock market in 2022.
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