The Nasdaq 100 index diverged with its peers like the Dow Jones and the S&P 500 on Thursday as worries about tighter monetary conditions rose. The index collapsed by more than 385 points while the Dow and S&P fell by less than points. As a result, the QQQ stock price declined by more than 2.85%.
Nasdaq 100 is the flagship fund that tracks the biggest technology companies in the United States. Its biggest constituent include trillion-dollar companies like Tesla, Microsoft, Apple, and Google. It also has several mid-cap tech firms like DocuSign and Okta.
The index is known for being more sensitive to actions by the Federal Reserve. It does well when the Fed has embraced a relatively dovish view like it has done in the past two years.
Now, as the Fed moves to unwind its expansionary policy, analysts are concerned that tech firms will struggle. This explains why the QQQ stock and Nasdaq 100 index declined sharply on Thursday.