Nasdaq Falls 748 Points as Investors Weigh Whether AI Bubble Is Bursting

The Nasdaq Composite tumbled 748 points, or 2.9%, on Friday, reviving debate over whether the market's AI-driven rally is unraveling. Data from Ned Davis Research show 42 of the 50 worst single-day declines since the index's 1971 inception — 84% — occurred during bear markets, even though bear-market days account for just 25% of all trading sessions since then. The index now sits 5.1% below its record high set three weeks ago, a pattern that differs from the 2000 dot-com peak, when the Nasdaq held roughly flat for three weeks after its March 10 high before selling off sharply. One contrast offers a contrarian signal: the Hulbert Nasdaq Newsletter Sentiment Index, tracking recommended equity exposure among Nasdaq-focused market timers, has dropped 76 percentage points over the past three weeks to 6.2%, indicating near-total withdrawal from stocks. At the 2000 top, that allocation rose in the weeks after the peak. Whether current sentiment is cautious enough to halt the decline will be tested in coming weeks.