Expert Opinions on Nasdaq’s Recent Correction

The Nasdaq 100 index experienced a significant decline of over 10% from its recent peak, marking a technical correction. On Monday, the index dropped below 28,000 points, a 10.4% fall from its October 6 high of over 31,000 points. This downturn raises concerns about the potential stalling of the AI-driven market boom.

The third correction of 2026 for the Nasdaq 100 highlights investor anxiety over the substantial investments Big Tech is making in AI and when these might yield returns. On Tuesday morning, the Nasdaq 100 showed some recovery, rising 0.7% to around 28,200 points, remaining 9.7% below its earlier high.

David Rosenberg, president of Rosenberg Research, suggested the correction was inevitable due to the influx of capital into companies claiming AI connections. He noted both large companies like Microsoft and Alphabet, and their suppliers, faced sell-offs due to heavy spending and not yet realizing expected profits.

Jim Reid, head of macro research at Deutsche Bank, highlighted speculation of a blue wave in the midterms affecting tech stocks. He noted potential Democratic victories could introduce more regulatory challenges and hurdles for tech advancements, including data center development.

Neil Wilson, an investor strategist at Saxo UK, shared that fund managers are reducing AI-related exposures. Morgan Stanley’s data indicated a significant drawdown by equity long/short hedge funds, with increased scrutiny over AI investment returns. Wilson described the situation as a “bubble bursting moment.”

The Kobeissi Letter emphasized concerns around political gridlock impacting tech stocks. The commentary noted fears of Democrat control in the midterms, potentially leading to legislative standstills and affecting AI innovation.