Nasdaq 100 enters correction, down 10% from October peak

The Nasdaq 100 index entered a correction on Monday, closing below 28,000 points, a 10.4% drop from its October 6 peak. Experts attribute the decline to concerns over AI investment returns and uncertainty surrounding the midterm elections. Economist David Rosenberg said the correction was "probably inevitable" given massive AI-related spending, noting both AI suppliers and major tech firms like Microsoft and Alphabet have fallen as investors question when investments will pay off. Deutsche Bank's Jim Reed cited expectations of a Democratic midterm victory potentially leading to stricter AI regulation. The index rebounded 0.7% in Tuesday morning trading, reducing the decline to 9.7%. Saxo UK's Neil Wilson described the situation as "a bit of a bubble-bursting phase," noting hedge funds have reduced positions at the fastest pace since 2016.