9 of the Last 10 Nasdaq Corrections Ended Higher in 6 Months. Will the Fed Allow It?

The Nasdaq Composite dropped 5.52% to 24,315 on Thursday and fell into correction territory. Chip stocks led the selloff after Democrats won both chambers of Congress and governor races in major data center states.

The close left the index about 12% below its October 6 record. Past corrections mostly ended in rebounds, but the Federal Reserve (Fed) could complicate the comeback.

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What the Last 10 Nasdaq Corrections Show

Recent corrections have mostly recovered. According to CNBC data, the Nasdaq traded higher six months later in nine of its previous 10.

The 10 cases averaged a 17.03% gain over six months, measured from the first close in correction territory.

The first month was negative in four of the 10 cases. In March 2025, the index dropped 13.73% over the next month, then stood 20.1% higher after six months.

January 2022 was the lone exception, with the index 18.32% lower six months later and 24.32% lower after a year.

The Fed’s path helps explain why 2022 broke the pattern.

Will the Fed Pause Like 2018 or Keep Hiking Like 2022?

The central bank raised rates four times in 2018, including in December. The October 2018 correction recovered after the Fed signaled a pause in January 2019.

In 2022, the Fed kept tightening and raised rates seven times that year. This year, the Fed lifted its benchmark range to 3.75%–4.00% in September, its first hike since 2023.

Policymakers held in October, but Governor Lisa Cook and Cleveland Fed President Beth Hammack voted for another quarter-point increase.

Traders still lean toward a December hike, though with less conviction than a few days ago. CME FedWatch put December Fed rate hike odds at 68.1% on Thursday, down from 82.7% a day earlier.

A falling stock market could also do some of the Fed’s work. BMO Capital Markets economist Jennifer Lee made that case earlier this month, BeInCrypto reported.

The October jobs report, due Friday, will test both views. Economists expect 65,000 new jobs and a 4.2% unemployment rate, according to FactSet. A stronger reading could firm up bets on a December hike.

Bitcoin (BTC) holders face the same Fed question after the token fell with tech stocks during Thursday’s selloff. The Fed’s December 9 decision may show whether it keeps hiking, as in 2022, or holds, as in early 2019.

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