# The Nasdaq 100 On Track to Have its Best Week Since March 2010
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2023-04-10
Category: INVESTING
Category URL: https://financedigest.com/category/investing
Meta Title: Nasdaq 100 Records Best Week Since March 2010
Meta Description: Discover why the Nasdaq 100 is on track for its best week since March 2010, outperforming the S&P 500 and Dow Jones Industrial Average. Learn how top tech
URL: https://financedigest.com/the-nasdaq-100-on-track-to-have-its-best-week-since-march-2010html

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The Nasdaq 100, which is made up of the top 100 non-financial companies listed on the Nasdaq Stock Market, has been on track for its best week since March 2010. As of Friday’s close, the index had gained more than 4% for the week, marking a significant rebound from its recent dip in September.

The Nasdaq 100 has been a top performer in the stock market this year. In fact, it has outpaced both the S&P 500 and Dow Jones Industrial Average by a significant margin. For instance, as of September, the Nasdaq was up over 20% year-to-date, while the S&P was up around 16%, and the Dow was up just under 14%. This is a remarkable feat considering that technology stocks have been facing headwinds due to [rising inflation concerns](https://www.financedigest.com/shares-rise-but-concern-mounts-over-inflation-flare-up.html "Shares rise, but concern mounts over inflation flare-up") and supply chain disruptions. Nonetheless, investors are showing confidence in these companies’ long-term growth prospects and are continuing to pour money into them.

## **Strong Performance**

Looking ahead, it’s important to note that the performance of theNasdaq 100 is largely driven by a handful of its largest constituents. In fact, a recent analysis found that in 2023, just 10 [stocks within the index are expected to account for 88% of its gains](https://www.financedigest.com/stocks-dollar-gain-on-resilient-u-s-economy.html "Stocks, dollar gain on resilient U.S. economy").

[What is the Nasdaq 100](https://www.plus500.com/en/Instruments/NQ/What-is-the-Nasdaq-100~1) then?The Nasdaq 100 is made up of the top 100 non-financial companies listed on the Nasdaq Stock Market, has been on track for its best week since March 2010 **.** This includes tech giants like Apple, Amazon, and Microsoft, which have consistently outperformed other companies within the Nasdaq 100. While this may raise concerns about diversification within the index, it also highlights the importance of carefully selecting individual stocks rather than relying solely on broad-based [funds or ETFs when investing](https://www.financedigest.com/norway-wealth-fund-to-consider-investing-in-unlisted-equities.html "Norway wealth fund to consider investing in unlisted equities") in tech-heavy indexes like the Nasdaq 100.

To put this in perspective, imagine a high school basketball [team where only 10 players out of a roster of 100 accounts](https://www.financedigest.com/what-can-accountants-learn-from-great-britains-olympic-team.html "What can accountants learn from Great Britain’s Olympic team?") for 88% of the points scored throughout the entire season. While those 10 players may be incredibly talented and valuable to the team’s success, it also highlights potential weaknesses and vulnerabilities if any one of them were to get injured or underperform.

Similarly, investors should be aware that while certain companies within the Nasdaq 100 may be driving their overall performance, there is always the possibility for unexpected events or changes in market conditions that could impact individual stocks and ultimately affect the index.

## **Despite Recent Bank Failures**

It’s worth noting that the Nasdaq 100’s impressive performance comes at a [time when other sectors](https://www.financedigest.com/why-its-time-to-centralise-public-sector-technology.html "Why it’s time to centralise public sector technology"), such as financials, have struggled. In recent weeks, several banks have failed stress [tests and faced](https://www.financedigest.com/china-arrivals-in-uk-next-week-will-not-face-compulsory-covid-tests-independent.html "China arrivals in UK next week will not face compulsory COVID tests -Independent") regulatory scrutiny. The overall market is still set to end March on a high note, with the [S&P 500 also posting gains](https://www.cnbc.com/2023/02/02/stock-futures-fall-after-earnings-reports-from-apple-alphabet-disappoint-investors.html) for the week.

This suggests that while certain sectors may face challenges or volatility in the short term, there is still optimism regarding the broader economic recovery and potential for growth in the coming months. As always, [investors should keep a close](https://www.financedigest.com/optable-closes-20-million-series-a-financing-broadens-investor-syndicate-in-new-round.html "Optable Closes  Million Series A Financing, Broadens Investor Syndicate in New Round") eye on market trends and developments to make informed decisions about their portfolios.

One interesting perspective to consider is how the pandemic has impacted the performance of different sectors within the market. While [banks have struggled due to low-interest rates](https://www.financedigest.com/bank-of-englands-mann-doubles-down-on-backing-for-rate-hikes.html "Bank of England’s Mann doubles down on backing for rate hikes") and loan defaults, technology companies have thrived in the current environment. This shift towards digitalization and remote work has accelerated trends that were already underway, such as e-commerce and [cloud computing](https://www.financedigest.com/the-value-of-cloud-computing.html "The Value of Cloud Computing").

As a result, [investors have been flocking towards tech stocks](https://www.financedigest.com/influx-of-one-time-investors-swapping-stocks-for-bricks-and-mortar-reports-agency.html "Influx of ‘one-time’ investors swapping stocks for bricks and mortar reports agency"), which has boosted the Nasdaq 100 index despite challenges faced by other sectors. This highlights how [important it is for investors](https://www.financedigest.com/despite-the-headwinds-investors-have-important-reasons-to-be-cheerful.html "DESPITE THE HEADWINDS, INVESTORS HAVE IMPORTANT REASONS TO BE CHEERFUL") to stay attuned to changing market dynamics and adjust their portfolios accordingly.

## **US Dollar Index**

Another factor contributing to the Nasdaq 100’s strong performance is the recent decline in [yields on the 10-year Treasury](https://www.financedigest.com/wall-st-flutters-treasury-yields-ease-as-powell-resumes-testimony.html "Wall St flutters, Treasury yields ease as Powell resumes testimony") note, which has fueled a tech rally. As yields on the benchmark bond have fallen, [investors have sought out higher-yielding assets like stocks](https://www.financedigest.com/uk-stocks-slip-as-rate-hike-worries-grip-investors.html "UK stocks slip as rate hike worries grip investors"), particularly those in the tech sector.

[A weaker US dollar index](https://www.reuters.com/markets/currencies/dollar-slides-sluggish-us-data-aussie-steadies-ahead-rba-2023-04-04/) has also contributed to this trend by making US exports more competitive and boosting profits for companies with global operations. This combination of factors has created a favorable environment for tech [stocks and helped drive the Nasdaq 100’s impressive gains](https://www.financedigest.com/stocks-dollar-gain-on-soft-landing-hopes.html "Stocks, dollar gain on soft landing hopes") in recent weeks.

To further illustrate the impact of lower yields on the tech sector, consider a hypothetical scenario where an investor has $10,000 to [invest in either bonds or tech](https://www.financedigest.com/uks-dominos-expects-tech-investments-to-hit-2023-profit.html "UK’s Domino’s expects tech investments to hit 2023 profit") stocks. With yields on the 10-year Treasury [note at historically low](https://www.financedigest.com/dollar-falls-to-nine-month-low-as-powell-notes-progress-in-disinflation.html "Dollar falls to nine-month low as Powell notes progress in disinflation") levels, investing in bonds may only yield a return of around 1% annually. In contrast, investing in tech stocks could potentially [yield much higher](https://www.financedigest.com/wall-st-indexes-mixed-treasury-yields-tick-up-as-higher-rates-loom.html "Wall St indexes mixed, Treasury yields tick up as higher rates loom") returns if the sector continues to perform well.

Furthermore, if the US dollar index were to continue to decline as it has been recently, this could also benefit tech companies with global operations. For example, a weaker dollar makes it less expensive for foreign buyers to purchase goods and services from US-based companies. This [increased demand for products and services could translate into higher profits](https://www.financedigest.com/4-tips-for-landlords-to-increase-rental-property-profits.html "4 Tips for Landlords to Increase Rental Property Profits") and share prices for these firms.

While there are always risks associated with investing in any particular sector or index like the Nasdaq 100, recent market trends suggest that technology may continue to be a strong performer in the coming months. As always though, investors should consult with financial [advisors and conduct their own research before making any investment](https://www.financedigest.com/5-tips-choosing-right-investment-advisor.html "5 tips for choosing the right investment advisor") decisions.

## **Potential Risks and Challenges**

While the Nasdaq 100 has seen strong gains in recent weeks, there are still potential [risks and challenges](https://www.financedigest.com/5-challenges-to-overcome-in-governance-risk-and-compliance-magazine.html "5 Challenges to Overcome in Governance, Risk and Compliance-Magazine") that could impact its performance in the future. One of the main concerns is a potential increase in interest rates, which could lead to a rotation out of high-growth tech stocks and into other sectors like financials or industrials.

Ongoing [economic uncertainty](https://www.financedigest.com/combatting-economic-uncertainty-in-2023-with-the-payments-sector-2.html "Combatting economic uncertainty in 2023 with the payments sector") and geopolitical tensions could also create volatility in the market. Finally, there is always the risk of company-specific issues or negative news impacting individual stocks within the index. As with any investment, it’s important for [investors to consider these potential](https://www.financedigest.com/virgin-orbit-says-space-startup-in-talks-with-potential-investors.html "Virgin Orbit says space startup in talks with potential investors") risks and weigh them against potential rewards when deciding whether to invest in Nasdaq 100 companies.

## **Final Words**

The Nasdaq 100’s impressive performance in recent weeks has significant implications for both investors and the broader market. For investors, it highlights the [potential for strong returns from tech-heavy indexes and individual stocks](https://www.financedigest.com/stocks-becalmed-before-potential-cpi-storm.html "Stocks becalmed before potential CPI storm") within them, particularly those with a proven track record of outperformance.

However, it also underscores the importance of diversification and careful consideration of potential risks when [building a portfolio](https://www.financedigest.com/building-a-portfolio-for-retirement.html "Building A Portfolio For Retirement"). For the broader market, the Nasdaq 100’s gains suggest that there is still optimism regarding [economic recovery and growth despite](https://www.financedigest.com/uae-plans-long-term-economic-ties-with-israel-despite-political-strains.html "UAE plans long-term economic ties with Israel despite political strains") ongoing challenges. As always, investors should stay informed about market [trends and developments to make informed investment](https://www.financedigest.com/top-5-investment-trends-to-watch-this-summer.html "Top 5 Investment Trends to Watch this Summer") decisions that align with their financial goals.


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