The Nasdaq 100 Index is on track to enter a correction as worries about the eventual payoffs from artificial intelligence investments sour sentiment in the technology giants that have powered most of this year’s stock-market advance.
The technology-heavy benchmark slid 1.6% on Tuesday, leaving it on track to close in a correction, which is typically defined as a drawdown of 10% or more from a peak. It only took 38 trading days for the gauge to reach the technical threshold, a stark contrast from its previous correction in March. Back then, the descent from an October 2025 record high took more than 100 sessions.
Tuesday’s drop in the Nasdaq 100 came as losses in semiconductor stocks deepened as signs of progress in China’s advanced chipmaking industry compounded worries about the sustainability of the artificial intelligence spending boom.
Last week saw Alphabet Inc. suffer its biggest one-day drop in more than a year as its results showed that the Google parent is spending so much that free cash flow turned negative for the first time in its history as a public company. It also signaled a lot more spending going forward, which overshadowed a number of positives, including robust growth in its cloud-computing business.
