The Nasdaq Just Hit Correction Territory. History Says the Stock Market Will Do This Next (Hint: It May Shock You).

By Trevor Jennewine – Mar 28, 2026 at 3:48AM ESTKey PointsThe Nasdaq Composite recently closed more than 10% below its record high, putting the technology-heavy index in market correction territory.During the last 15 years, the Nasdaq Composite has returned an average of 22% during the 12 months following its first close in correction territory.The Invesco QQQ Trust tracks the 100 largest nonfinancial companies listed on the Nasdaq Stock Exchange, and it return 16.6% annually over the last 15 years.The U.S. stock market is having a dismal year. Investors are concerned about the economy, not just because President Trump's tariffs have coincided with slower GDP and jobs growth but also because the U.S.-Iran war has pushed oil prices to a multiyear high. Consequently, the three major stock market indices have dropped sharply from their peaks: The S&P 500 (^GSPC 1.67%) is down 7.1%, the Dow Jones Industrial Average (^DJI 1.73%) is down 8.4%, and the Nasdaq Composite (^IXIC 2.15%) is down 10.6%. That puts the Nasdaq squarely in market correction territory. While that sounds ominous, the index has usually rebounded quickly. History says this will happen next. Image source: Getty Images. History says the Nasdaq Composite could soar a shocking 22% in the next year The Nasdaq Composite tracks the performance of over 3,300 companies listed on the Nasdaq Exchange. The index is most heavily weighted toward the information technology and consumer discretionary sectors and is commonly regarded as a benchmark for growth stocks. On March 26, the Nasdaq entered market correction territory, meaning it closed more than 10% below its most recent bull market peak. For investors curious about the specific dates, the index hit a record high of 23,958 on Oct. 29 but has since dropped to 21,408 amid economic uncertainty surrounding Trump's tariffs and soaring oil prices. Drawdowns are never pleasant, but corrections are more common than investors may realize. The Nasdaq has fallen at least 10% from its record high a dozen times since 2011, meaning the index has suffered corrections almost annually over the last 15 years. In most cases, the Nasdaq recouped its losses quickly. The table shows the Nasdaq's 12-month return following its first close in correction territory.

Nasdaq First Closes in Correction Territory 12-Month Return Aug. 4, 2011 16% May 18, 2012 26% Nov. 14, 2012 40% Aug. 24, 2015 15% Oct. 24, 2018 15% June 3, 2019 32% Feb. 27, 2020 54% Sept. 8, 2020 41% March 8, 2021 2% Jan. 19, 2022 (24%) Aug. 2, 2024 22% March 6, 2025 24% Average 22% Data source: YCharts. Table created by author. As shown, during the last 15 years, the Nasdaq has returned an average of 22% over the 12-month period following its first close in correction territory. In other words, the index will advance 22% to 26,118 by March 26, 2027, if its performance aligns with the historical average. Also noteworthy is that the Nasdaq has achieved a positive 12-month return following the onset of 11 of the last 12 stock market corrections. So history says the probability of a positive return during the next year is about 92%. Of course, past performance is never a guarantee of future results.

The Nasdaq Composite may decline much further if the U.S.-Iran war keeps oil prices elevated. In fact, Moody's chief economist Mark Zandi believes sustained conflict in the Middle East could push the U.S. economy into a recession. How investors can capitalize on potential upside in the Nasdaq Composite The Invesco QQQ Trust (QQQ 1.86%) tracks the Nasdaq-100, a subset of the Nasdaq Composite that includes the 100 largest nonfinancial companies listed on the Nasdaq Stock Exchange. The top 10 holdings are listed by weight below: Nvidia: 8.7% Apple: 7.4% Alphabet: 6.5% Microsoft: 5.5% Amazon: 4.5% Tesla: 3.8% Meta Platforms: 3.5% Walmart: 3.3% Broadcom: 3% Costco Wholesale: 2.4% ExpandNASDAQ: QQQInvesco QQQ TrustToday's Change(-1.86%) $-10.68Current Price$563.11Key Data PointsDay's Range$561.57 - $571.0052wk Range$402.39 - $637.01Volume4.8MAvg Vol64MDividend Yield0.50% The Invesco QQQ Trust returned 912% (16.6% annually) in the last 15 years despite the Nasdaq Composite suffering 12 market corrections during that period. Investors should set their future expectations a bit lower, but the index fund is likely to perform well in the years ahead because it is heavily invested in technology stocks well positioned to capitalize on the artificial intelligence (AI) boom. The Invesco QQQ Trust has an expense ratio of 0.18%, meaning shareholders will pay $18 per year on every $10,000 invested. The index fund's largest drawback is concentration risk. The five largest holdings account for nearly one-third of its performance. Nevertheless, I think risk-tolerant investors with a time horizon of at least five years should consider buying a position in the Invesco QQQ Trust today.Read NextMar 23, 2026 •By Anthony Di PizioShould You Buy the Invesco QQQ ETF During the Stock Market Sell-Off? History Offers a Clear Answer.Mar 17, 2026 •By David Jagielski, CPAThe Nasdaq Is Down 3% This Year. Is the QQQ Invesco Trust Still Worth Buying Right Now?Mar 17, 2026 •By Rachel WarrenBest Blue Chip ETFs to Buy in 2026Mar 16, 2026 •By Ben GranVONG vs. QQQ: Which Growth ETF Is the Better Buy?Mar 11, 2026 •By Rachel WarrenHow to Buy Warner Bros. Discovery Stock (WBD)Mar 6, 2026 •By Dan CaplingerInvestors in This ETF Have Earned Far More Than They Could Have Reasonably ExpectedAbout the AuthorTrevor Jennewine is a contributing Motley Fool stock market analyst covering technology, cryptocurrency, and investment planning. Prior to The Motley Fool, Trevor managed several pharmacies. He holds a doctor of pharmacy degree from Oregon State University, a master’s degree in business administration from Miami University, and a bachelor’s degree in biology from Miami University.TMFphoenix12X@tjennewine1Stocks MentionedInvesco QQQ TrustNASDAQ: QQQ$562.58(-1.95%)-$11.21Dow Jones Industrial AverageDJINDICES: ^DJI$45,166.64(-1.73%)-$793.47S&P 500 IndexSNPINDEX: ^GSPC$6,368.85(-1.67%)-$108.31NASDAQ Composite IndexNASDAQINDEX: ^IXIC$20,948.36(-2.15%)-$459.72*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.