The Nasdaq Just Hit Correction Territory. History Says the Stock Market Will Do This Next (Hint: It May Stun You)
The Nasdaq closed in correction territory as post-midterm euphoria quickly gave way to anxiety about AI spending.
The Nasdaq Composite experienced a shocking 5.3% decline in November, entering correction territory for the first time since March 2025. This follows a dismal October, during which the S&P 500 fell 0.9% and the Nasdaq fell 5.3%. The sell-off was driven by concerns about the sustainability of the artificial intelligence boom and potential slowdown in AI spending following Democratic victories in the midterm elections.
Historically, corrections have been a favorable time for investors, as the Nasdaq has recovered an average of 21% in the year following its first close in correction territory. The Invesco QQQ Trust, which tracks the Nasdaq-100, has returned 1,480% since its inception in 1999, significantly outperforming the broader S&P 500. The AI boom is expected to continue, with JPMorgan Chase predicting AI adoption is happening three times as quickly as internet adoption.
As a result, the technology-heavy Nasdaq-100 is poised for strong returns, making it an opportune time for investors to enter the market despite the recent correction.
Written by urgent.news from Motley Fool's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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