The Nasdaq-100 closed Monday, November 2, down 1.39% at 27,989.82 — more than 10% below its October 6 record close of 31,224.47 — putting the index in a technical correction for the third time this year, according to Political.org, which pegs the data to Yahoo Finance daily closes.
Friday's session had already flirted with the line: the index fell 3.46% to 28,384.85, spending part of the day more than 10% below its record before clawing back to a 9.1% deficit at the close. Monday finished the job. The semiconductor index dropped about 3.4%; Marvell plunged 12.72% after its $115 billion Lumentum deal, Intel fell 8.80% on top of Friday's nearly 29% collapse, and AMD dropped 7.52%, according to BigGo Finance citing Wind data. Oracle sank 8.85% on its $20 billion raise. Even so, Amazon rose 2.20% and Tesla 1.00% — the selling was concentrated, not universal.
What makes this correction different isn't the number — it's the complaint. The index already corrected twice this year, in March and again in the summer, and both reversed into new records. This one isn't about whether AI demand is real; the demand forecasts keep getting more bullish. It's about who pays for it. Oracle's $20 billion raise, Meta's reported $20 billion-plus bond sale, Alphabet's second euro bond at higher yields, data-center credit default swaps near record highs — hyperscaler credit spreads have now widened to record levels.
"The bar for performance is rising and higher volatility in the AI trade is likely to be the new normal in this stage of the cycle," UBS CIO Mark Haefele told Reuters. Or as Miller Tabak's Matt Maley put it: "Growing doubts about the return on AI investment may prove far more important in determining the market's future direction than historical patterns."
What to watch: the October jobs report lands November 6, Nvidia reports in mid-November, and Tuesday's midterms could decide how much political cover the data-center buildout keeps. The AI trade isn't dying — it's getting a credit check.
— via Political.org