Nasdaq 100 has entered correction territory, falling around 11% from its June record high.The main d

Nasdaq 100 has entered correction territory, falling around 11% from its June record high.The main driver: higher-for-longer interest rates.When interest rates remain elevated:Future earnings of growth companies are discounted more heavily, reducing the valuation of long-duration assets like technology stocks.AI and semiconductor stocks, which led the rally, become vulnerable after stretched valuations.Bond yields rise, making fixed-income assets more attractive compared with equities.Investors start questioning whether earnings growth can justify current multiples.The market is now pricing in a more cautious Fed path: rate cuts may come slower than expected if inflation remains sticky.The correction is not necessarily a signal of economic collapse — it is a valuation reset after a powerful rally. The key variables ahead are:Inflation trend → Fed policy → Treasury yields → AI/tech earnings growth.If yields stabilize and the Fed becomes more accommodative, technology stocks could find support. But if real rates continue rising, pressure on high-growth equities may persist.