washout

Definition

A period of significant decline or a thorough collapse in market value following a period of high performance.

Etymology

Originating from late 19th-century American English, the term originally referred to a section of a road or railway destroyed by rushing water. It evolved metaphorically to describe any complete failure, defeat, or collapse of an endeavor or situation.

In the news

The term describes the intense three-week sell-off in semiconductor stocks, highlighting the rapid reversal of momentum trades as investors exited their positions. It emphasizes the severity of the financial losses during this specific market downturn.

Global tech stocks fall as AI trade goes into reverse

Financial Times

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