Nasdaq-100 Hits Third Correction of 2025 as AI Doubts Deepen

The Nasdaq-100 closed at 27,989.82 on Monday, down 10.4% from its October 6 record close of 31,224.47 — its third correction of the year, according to Dow Jones Market Data.

A correction is a drop of at least 10% from a recent peak. The index has now notched three of them in 2025 alone: the first on March 27, the second on July 29, and now this one, which began with the "tech wreck" in October and rolled into November.

The driver, according to Steve Sosnick, chief strategist at Interactive Brokers, is a shift in how investors think about artificial intelligence spending.

"The main root of it is people are questioning some of the assumptions they made about AI," Sosnick said in a phone call after Monday's closing bell.

What changed on AI?

For much of the past few years, Sosnick said, the working assumption was that "all money spent on artificial intelligence was well spent." Now the question has hardened: whether all the borrowings funding the data-center and infrastructure buildout will get paid back adequately.

That question hits the index where it lives. The Nasdaq-100 tracks many of the largest U.S. and international nonfinancial companies, and its constituents include Nvidia, Apple, Microsoft, Micron Technology, Amazon.com, Meta Platforms, Google, SpaceX and Intel — names that now fill investor portfolios.

The damage spread unevenly on Monday. The S&P 500 ended down just 0.5%, with most of its 11 sectors positive, while the Nasdaq Composite fell 1.1% and sits 8.8% below its own October 6 peak, per Dow Jones Market Data.

"The tech wreck from October continued to start November," said Ryan Detrick, chief market strategist at Carson Group. He noted Monday's action mirrored the past month, with tech "once again pulled the major indexes lower."

How bad has 2025 been for the index?

The corrections have come fast. The first arrived March 27, and the index bottomed a few days later, down 12% from its October 29, 2025 high. The second struck July 29, when the index fell 11% from its June 2 high before recovering.

Volatility signals have sharpened too. While swings in the Cboe Volatility Index — the "fear gauge" tied to S&P 500 options — have picked up, the volatility gauge tied specifically to Nasdaq-100 options has been more pronounced in recent months.

Even after the slide, the Nasdaq-100 remained up 10.9% on the year through Monday, according to FactSet data.

Individual names show sharper stress. Intel dropped another 8.8% Monday after a negative reception to its earnings last week. The chipmaker's stock has plunged 57.4% since its record close of $140.94 on June 22.

Is a bear market next?

Not every Nasdaq-100 correction in the past five years slid into a bear market — a decline of 20% or more — but some did, and the pattern is on investors' minds.

Sosnick pointed to a structural vulnerability this time: investors are already heavily positioned in tech. That makes it "hard to continue rallying, even if you have good news," he said. "And then that leaves you more susceptible to selling, because there's less dry powder to buy dips."

He also kept the pullback in perspective. Corrections of 10% "aren't the end of the world," Sosnick noted, and usually happen with some regularity.

His caveat cuts both ways, though: "But if you are priced for perfection, you have to deliver perfection."

The next test is whether AI's biggest spenders can deliver exactly that — or whether the question about data-center debt keeps compounding into December.