The Nasdaq Composite (NASDAQINDEX: ^IXIC) fell by 4% on Monday, marking its worst day since September 2022, and it remains 12.5% below its peak after today's trading. When major indexes reach new highs, it's easy to forget the advantages of dividend stocks. Companies like PepsiCo (NASDAQ: PEP), Chevron (NYSE: CVX), and Southern Company (NYSE: SO) offer high yields that can generate significant passive income.
In a surprising development, the Nasdaq Composite has dropped more than 13% since February 18. This decline is mainly due to U.S. President Donald Trump's tariffs and disappointing economic data that may suggest a recession or stagflation. Previously, the market had soared to high levels as investors focused on artificial intelligence (AI) and ignored valuations.
Investors have faced difficulties recently, as the Nasdaq Composite has dropped over 13% in just three weeks, entering correction territory. Many Americans were already anxious about the stock market before this sharp decline. By the end of February, pessimism reached its highest point in a year, with 60% of U.S. investors expressing a negative outlook on the market's future, according to a weekly survey by the American Association of Individual Investors.
On Wednesday, Wall Street took advantage of lower prices in riskier stocks after the recent inflation report was better than anticipated. The Nasdaq Composite increased by 1.2%. Both the S&P and Nasdaq ended their two-day decline.
On Wednesday, major US stock indexes mostly finished higher after new official data revealed information about consumer behavior.
Some stocks were already priced too low before this week's drop. Now, they represent long-term opportunities that are hard to ignore at their current prices.
Investors are facing the first major stock market decline of 2025. It's better to accept that stock market corrections will occur occasionally instead of trying to forecast them, which is nearly impossible. So, what actions can investors take in response to these market corrections?
The Dow Jones Industrial Average fluctuated between rising and falling, finishing 0.2% down. Meanwhile, the Nasdaq composite increased by 1.2%. While AI stocks performed well, U.S. companies affected by tariffs from Europe and other regions had a negative impact on the market.
Donald Trump has spoken out against Ireland for attracting US companies with its tax policies, warning that he might intensify his trade conflict with the EU.
US stock market indexes rose during the day after new data revealed that consumer inflation had increased.