OKLL

By Joy Wiltermuth

The 'tech wreck' from October continues. Is a bear market next?

The Nasdaq-100 fell into a correction on Monday, as tech stocks continued to slide on AI concerns

Another brutal day for tech stocks left the Nasdaq-100 index in correction territory on Monday - marking its third drop of at least 10% from a recent peak this year.

"The main root of it is people are questioning some of the assumptions they made about AI," said Steve Sosnick, chief strategist at Interactive Brokers, in a phone call after the closing bell Monday.

For much of the past few years, the main assumption had been that "all money spent on artificial intelligence was well spent," Sosnick said. Now, however, one of the bigger questions facing investors is whether all the borrowings for the data-center and infrastructure buildout are going to get paid back adequately, he said.

The Nasdaq-100 NDX includes many of the largest U.S. and international nonfinancial companies. Its constituents have included Nvidia (NVDA), Apple (AAPL), Microsoft (MSFT), Micron Technology (MU), Amazon.com (AMZN), Meta Platforms (META), Google (GOOGL) (GOOG), SpaceX (SPCX), Intel (INTC) and many other tech names that now fill investor portfolios.

The index closed Monday at 27,989.82, or 10.4% below its Oct. 6 record-high close of 31,224.47, according to Dow Jones Market Data - a slump that can be seen in the below chart.

The chart also shows the dip where the index entered its first correction this year, on March 27. It bottomed out a few days later, down 12% from its Oct. 29, 2025 high, according to Dow Jones Market Data.

The second time it entered a correction this year and bottomed out was on July 29, when it fell 11% from its June 2 high. The Nasdaq-100 still was up 10.9% on the year through Monday, according to FactSet data.

While volatility has picked up lately in options tied to the S&P 500 SPX, as indicated by the Cboe Volatility Index VIX, swings in the "fear gauge" tied to the Nasdaq-100 specifically XX:VXN have been more pronounced in recent months, as the below chart shows.

The S&P 500 held up relatively better Monday, as it ended down only 0.5%, while the Nasdaq Composite COMP fell 1.1% to bring it 8.8% off its Oct. 6 peak, according to Dow Jones Market Data.

"The tech wreck from October continued to start November," said Ryan Detrick, chief market strategist at Carson Group. He noted that Monday's action was similar to the past month, with most of the S&P 500's 11 sectors positive while tech "once again pulled the major indexes lower."

Of note, Intel shares dropped another 8.8% on Monday in the wake of a negative reception to its earnings last week. The chip maker's stock has plunged 57.4% since reaching a record close of $140.94 a share on June 22.

While not all corrections for the Nasdaq-100 were followed by a bear market, some in the past five years were, as the below chart shows.

Here's a look at Nasdaq-100 corrections in the past five years. Some ended in a drop of at least 20% from a previous peak, known as a bear market.

This time, however, many investors are already more fully invested in tech names, which means "it's hard to continue rallying, even if you have good news," according to Sosnick at Interactive Brokers. "And then that leaves you more susceptible to selling, because there's less dry powder to buy dips," he added.

Still, corrections of 10% aren't the end of the world, and usually happen with some regularity.

"But if you are priced for perfection, you have to deliver perfection," Sosnick said.

Mike DeStefano contributed.

-Joy Wiltermuth

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.