Nasdaq Plunges 5.5%—Is This the Start of a Crash?

The tech-heavy Nasdaq stock exchange fell sharply on Thursday, raising questions about whether it marks the start of a market crash. The decline was as much as 5.5 percent during the day, though it eased somewhat by the close. The drop also pulled the New York Stock Exchange down by over 3 percent. Experts note that large declines signal market instability, but it is impossible to know in real time if this is a crash's beginning. The decline follows prolonged uncertainty over whether AI-related tech stocks are overvalued. The situation shares similarities with the early 2000s IT crash, when overvalued internet companies collapsed. However, a key difference is that today's AI firms already generate substantial profits, unlike the earlier IT companies. Whether current AI investments meet high expectations remains to be seen.