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Finance Studio Advisors
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The Ledger Letter
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Three Forces Behind the Drawdown
The Nasdaq is in correction. The S&P 500 is heading for five straight weekly losses. The leadership cohort that drove three years of gains is now leading the drawdown — and the damage is no longer isolated to speculative pockets. It's repricing risk assets broadly.
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The Breakdown
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01. The Nasdaq closed in correction territory Thursday, down more than 10% from its high. The S&P 500 fell 1.74%. The Dow dropped 469 points. It marked one of the sharpest risk-off sessions of the conflict.
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02. Leadership cracked. Meta fell roughly 8%. Semiconductors sold off sharply across the board. The damage was concentrated in the names that carried the market since 2023.
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03. Oil and yields rose together. Brent surged 5% back above $108, still 40% above pre-war levels. Two-year Treasury yields pushed toward 4%. That combination pressures both margins and valuations simultaneously.
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The Full Picture
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Three Forces Are Repricing Risk at Once
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This correction doesn't have a single catalyst. Three forces are compressing valuations at the same time. First, the energy shock. Oil has held around or above $100 for much of the past month, filtering into U.S. gas prices (up more than 30% since late February), shipping costs, food prices, and corporate input costs — squeezing both consumer demand and company margins. Second, interest rate expectations. The Fed rate-cut narrative that supported equity valuations throughout 2025 has reversed. Governor Waller cited the war's inflationary impact. Markets have largely priced out cuts this year and added a meaningful chance of a hike — which reprices growth stocks, leveraged positions, and duration exposure across portfolios. Third, the China trade escalation, happening quietly underneath the war headlines, is adding another layer of uncertainty for companies with global supply chain exposure.
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What the market is pricing now: recent gains in the leadership cohort — the mega-cap tech and semiconductor names — have been compressed quickly. A portfolio concentrated in those positions has given back a significant share of its 2025 performance. Since World War II, the S&P 500 has recovered from corrections in an average of four months. But this correction has an unusual feature: the near-term path may depend more on geopolitics than earnings. Trump extended the pause on Iran energy strikes for 10 days, until April 6. Iran rejected the US 15-point proposal and submitted its own terms. The next phase will depend heavily on whether the geopolitical backdrop stabilizes or deteriorates. In this tape, exposure matters more than conviction.
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Finance Studio Advisors
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