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Anatomy Of A Correction: Magnificent 7 Fall Mirrors 2022 Pattern But It's Comparable To 2018: Caused By Repricing Of 'Animal Spirits' Explains Expert

While the Nasdaq remains in correction territory, data from Fidelity Investments reveals that the current downturn closely mirrors the 2022 correction. However, this expert notes that the underlying causes differ, with the Magnificent 7 stocks being the common factor driving the index lower.

What Happened: The Nasdaq indices saw one of the quickest corrections in history from the most recent 52-week high scaled on Feb. 19 to a fall of over 10% by March 6, 2025. Similarly, the S&P 500 fell into the correction zone as of March 13, closing after scaling the Feb. 19 high.

According to Jurrien Timmer, the director of global macro at Fidelity Investments, this quick correction in 2025 looked like a “repeat of the 2022 bear cycle.” A chart shared by him, titled “Anatomy of a Correction,” highlighted all the market corrections since 1900.

“At first glance, that seems odd, since 2022 was driven by rising rates and this one is driven by a repricing of the ‘animal spirits’ playbook,” Timmer said.

He explained that the fall of Magnificent 7 stocks led to the similarity between the patterns of the two years. As rising discount rates impacted their long-duration valuations in 2022, the current ...