Tech-Led Rally Stalls as Nasdaq 100 Retreats From Record High

The technology-heavy Nasdaq 100 index experienced a notable pullback during Thursday’s session, interrupting its recent record-breaking performance. This downturn followed the index achieving an unprecedented peak just one day earlier. Market analysts pointed to profit-taking activity within the high-tech sector and mounting apprehensions about a potential artificial intelligence bubble as primary factors behind the decline.

Additional pressure came from climbing bond yields and persistent uncertainty surrounding the ongoing U.S. government shutdown, creating a cautious environment for investors.

Market Momentum Shifts Direction

Trading commenced with positive momentum carried over from Wednesday’s session, when the Nasdaq 100 had established its fresh all-time high at 25,137 points. The broader Nasdaq Composite Index even managed to reach a new intraday record of 23,062.62 points during early trading before market sentiment began to deteriorate.

As the session progressed, selling pressure intensified across major indices. The S&P 500 declined approximately 0.3%, while the Dow Jones Industrial Average registered a more substantial drop of about 0.5%.

Should investors sell immediately? Or is it worth buying NASDAQ 100?

Investor Caution Emerges After Strong Rally

The Nasdaq Composite ultimately closed at 23,024.63 points, representing a 0.1% decrease for the day. This reversal reflected a more guarded investor approach following several days of robust gains.

Market volatility showed a noticeable increase, with the CBOE Volatility Index (VIX) advancing 0.80% to reach 16.43 points. This movement suggests growing investor unease as market participants secured profits after recent record performances and debated whether AI-focused equities have become overheated.

U.S. financial markets will remain closed for the remainder of the trading week.