The Nasdaq 100 sign at the Nasdaq Market site on Thursday, November 5, 2026 in New York, USA.
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of Nasdaq Composite It entered correction territory on Thursday. History tells us that there may be more sell-offs in the short term, but a recovery will eventually take hold after three months.
The tech stock ratio fell more than 5% on Thursday, ending the day more than 11% below the record set last month. On Wall Street, a decline of more than 10% is a correction. A 20% decline is considered a bear market.
The past 10 correction episodes over the past decade have included declines in 2025, 2022, 2020, and 2018, followed by an even wilder month-long selloff. However, except once in 2022, the Nasdaq was back in up mode after six months.
Overall, the Nasdaq has risen an average of 9.41% from its correction bottom over the subsequent three months and 17.03% over the six months.
The January 2022 revision brings even more severe consequences. The Nasdaq fell another 18.3% over the next six months, and 24.3% a year later.
Nasdaq Composite
Deena Zaidi and Nick Wells
The amendment was prompted by Democrats sweeping the House and Senate in Tuesday’s midterm elections. The party also made significant gains in Texas, where Gina Hinojosa, who called for an immediate halt to data center development, won the gubernatorial election.
Investors are now weighing whether tighter state-level regulations could slow data center construction and put pressure on companies involved in the artificial intelligence trade.
Frank Cappellelli, founder of CappThesis, cited past midterm election cycles as a guide, noting that they indicate more volatility in the short term as well.
The chart analyst said the Nasdaq has risen in the 12 months following an election in all but one of the 13 midterm cycles since 1974.
“The caveat is that the path can be volatile,” he says.
Cappellelli pointed to 2018, when the Nasdaq rebounded the day after Democrats won the House. He said that after a significant drop in December, the index ended up rising about 15% in the year since the election.
Chip stocks fell on Thursday. iShares Semiconductor ETF (SOXX) It fell 12%, the worst day since the coronavirus outbreak in March 2020.
— CNBC’s Fred Imbert contributed to this report
