The Nasdaq 100 index confirmed a historical trend that it could be entering a bear market after it fell 3.81% on Monday, its worst day since 2022.
What Happened: The tech-heavy Nasdaq 100 index entered the correction territory last week on Thursday after slipping 9.76% from its previous record high of 22,222.61 points. It also declined below its 200-day moving average after nearly two years or 497 trading sessions.
However, after a slight relief on Friday, the index slumped on Monday, declining 12.46% from its previous high to 19,430.95 points.
While a market correction is defined as a 10% drop, and a bear market as a 20% drop from recent highs. Jason Goepfert, a consultant at White Oak Consultancy LLC, had highlighted a key trend last week.
According to him, the historical data suggested that each time the Nasdaq 100 index fell over 3.5% within the next two weeks of a correction, it always entered the bear market territory. Thus, just a day after the Thursday session, the index slipped by 3.81%, confirming this trend.
Goepfert reaffirmed his assumptions and said that a “bad scenario,” had been triggered and it was “Not the best sign for bulls.”
When asked if this “over 3.5% fall” had to be assessed after the end of two full weeks post correction, Goepfert said, “No, for this test (and any that I do) drawdown means the maximum loss at any point within the time frame. So the maximum loss needed to be at least 3.5% at any point within the two weeks.”
See Also: Nasdaq 100 To Enter Bear Market Territory? Next Two Weeks Crucial As 3.5% Fall Following Correction Can Make It A Reality, Warns Analyst
Why It Matters: Several factors have stacked up against the market’s downfall in 2025. The latest shocks come from President Donald Trump‘s tariff war with the U.S. trading partners, which has been triggering economic uncertainty. Trump, on Sunday, increased investor anxiety as he did not rule out the possibility of recession during an interview with Fox News.
But apart from this, experts have been warning of an impending fall.
Billionaire investor Ray Dalio warned of a potential AI stock bubble, during his appearance on the All-In Podcast in early February. He compared it to the dotcom bust, citing high valuations and interest rate risks.
He also emphasized prioritizing value over “good” companies, advising investors to focus on pricing. "A great company that gets expensive is much worse than a bad company that's really cheap," Dalio said.
Similarly, Howard Marks, who predicted the dot-com bubble, warned of similar dangers in his “On Bubble Watch” memo in early January. He cited high valuations, AI hype, and reliance on mega-cap tech that could lead to a bubble.
Meanwhile, the S&P 500 index also neared the correction zone as it was down 8.67% from its 52-week high of 6,147.43 to 5,614.56 points on Monday.
Price Action: The SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 index and Nasdaq 100 index, respectively, slumped on Friday. The SPY was down 2.66% to $560.58, and the QQQ also declined 3.88% to $472.73, according to Benzinga Pro data.
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