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Why the Nasdaq-100 Fell Into Its Third Correction of 2026
On November 2, the Nasdaq 100 fell 1.4% to 27,989.82—10.4% below its October 6 peak—and entered its third correction of 2026.
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Key takeaways
- On November 2, the Nasdaq 100 fell 1.4% to 27,989.82—10.4% below its October 6 peak—and entered its third correction of 2026.
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openai.comCreate a landscape editorial hero image for this Studio Global article: What drove the Nasdaq 100 into its third correction of 2026 on Monday, November 2, and how do its closing level, daily decline, distance fro. Article summary: The Nasdaq-100’s correction was driven chiefly by growing doubts that Big Tech’s enormous AI investment would produce profits quickly enough to justify valuations; Monday’s 1.4% decline took it into correction territory . Topic tags: general, news, general web, user generated. Style: premium digital editorial illustration, source-backed research mood, clean composition, high detail, modern web publication hero. Use reference image context only for broad subject, composition, and topical grounding; do not copy the exact image. Avoid: logos, brand marks, copyrighted characters, real person likenesses, fake screenshots, UI text, readable text, watermarks, charts w
The Nasdaq-100 closed at 27,989.82 on November 2, down 1.4% for the day and 10.4% below its October 6 peak of 31,224.47—enough to put it in correction territory, commonly defined as a fall of at least 10% from a recent high. It was the index’s third correction of 2026, though it remained up 11% year to date. 1
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The central worry was not simply that technology shares had fallen. Investors were questioning whether the enormous cost of building AI infrastructure would translate into profits soon enough to support the valuations placed on major technology companies. 1
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The selloff in context
The Nasdaq-100 had already dropped more than 9% from its October 6 peak by the end of October, according to a report tracking that peak-to-month-end decline. 10 On October 30, the Nasdaq-100 fell 3.5%, while the broader Nasdaq Composite fell 2.9%; those figures refer to different indexes, not conflicting estimates of the same move.
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For a monthly comparison, Reuters reported that the Nasdaq Composite lost 5.3% in October. That is a separate measure from the Nasdaq-100’s decline from its October 6 peak. 49 Likewise, the reported $2.85 trillion wiped from Nasdaq-listed shares during the selloff describes market value, not the index’s percentage return.
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Why AI investment became a source of concern
Alphabet’s results illustrate the tension investors were weighing. Google Cloud revenue rose to about $30.7 billion, more than doubling year over year, and cloud operating income increased to $11.12 billion. At the same time, Alphabet spent $51.36 billion on capital expenditure in the quarter and maintained a 2026 spending forecast of $195 billion to $205 billion, while signaling a significant increase in 2027. 31
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That combination offers two different signals: AI-related demand can support fast-growing businesses, but the infrastructure required to serve it carries a large and rising bill. Investors were looking for evidence that growth would ultimately generate adequate returns, rather than focusing on demand alone. 1
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Market commentary also linked Alphabet’s sharp post-results decline—reported at roughly $500 billion in lost market value—to concern that AI-powered search could challenge its advertising model. That was an investor concern reported at the time, not proof that AI search had already caused a decline in advertising revenue. 5
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The same broader reassessment affected other technology and AI-linked shares. Intel fell about 29% on October 30 after issuing weak sales guidance, adding to pressure on semiconductor stocks. 4
47 The available reports do not establish a comparable, detailed account of how Meta, Microsoft, or Amazon results individually drove the November 2 index decline, so their earnings should not be treated as a single verified cause.
Rotation out of technology—and a financing signal
Technology shares gave up early gains on November 2 as investors shifted exposure toward other parts of the market. The Nasdaq Composite and S&P 500 ended lower, while the Dow gained about 0.4%; the Nasdaq-100 fell 1.4%. 17
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Investors were also watching how companies would fund their AI buildouts. Oracle said it planned to sell $10 billion in common stock and $10 billion in bonds to help finance its AI expansion. The announcement made the funding needs of infrastructure investment more tangible, though it does not by itself establish the scale of borrowing across the technology sector. 17
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What could change the outlook
The selloff did not mean every investor viewed technology stocks as unattractive. Deutsche Bank reversed an earlier technology-sector downgrade and recommended an overweight position, arguing that the pullback could create a buying opportunity. 23
The key question is whether future results show that AI-related revenue and profit growth can keep pace with spending. Alphabet’s cloud growth is evidence of demand; its rising capital costs show why investors are also watching cash generation and the returns on new infrastructure. 31
32 That gap between the promise of AI and the cost of delivering it was the clearest thread linking the correction to the market’s broader concerns.
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What is the short answer to "Why the Nasdaq-100 Fell Into Its Third Correction of 2026"?
On November 2, the Nasdaq 100 fell 1.4% to 27,989.82—10.4% below its October 6 peak—and entered its third correction of 2026.
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