Nasdaq in correction after 5.3% drop on Nov. 5

The sell-off extended a dismal October, when the S&P 500 fell 0.9% and the Nasdaq declined 5.3%, its worst month since March 2025. The losses spilled into November, with the Nov. 5 drop of 4.1% and 5.3% erasing post-midterm election gains and pushing the Nasdaq into correction territory. Wall Street worries that Democratic midterm victories could slow AI spending.

Despite the drop, there is a historical pattern: over the last decade, the Nasdaq returned an average of 21% in the 12 months after its first close in correction territory. Applied to the current situation, that would imply a climb to 29,421 by November 2027, more than 6% above its previous record high. JPMorgan Chase strategists estimate AI adoption is happening three times as quickly as internet adoption, and the cost of AI is falling faster than any other transformative technology in history.

The Invesco QQQ Trust tracks the Nasdaq-100 and has returned 1,480% (10.5% annually) since its inception in 1999, outpacing the S&P 500's 885% (8.6% annually) over the same period. It argues that now is a particularly good time to buy shares given the correction, though investors should weigh the risks.