Nasdaq-100 Slumps 6% Below Peak as Tech Loses Market Dominance
The Nasdaq-100 remains 6% below its peak in early 2026, reflecting a broader shift in market sentiment. Technology, once a dominant force in the stock market today, is now the worst-performing sector in the S&P 500 this year. This decline follows a pattern seen in previous years, where weakening momentum often signalled sharper downturns ahead.
In 2024, the number of Nasdaq-100 stocks trading above their 200-day moving average fell steadily over the year. By mid-2025, this measure had peaked in the second quarter before reversing sharply. That same decline in 2021 had preceded a 30% drop in the index, driven by rising inflation and delayed action from the Federal Reserve.
A similar trend unfolded in 2024, just before the Nasdaq-100 suffered a correction of over 20%. The trigger then was the introduction of President Donald Trump's 'Liberation Day' tariffs, which disrupted market confidence.
Despite the struggles, only three sectors managed to outperform the S&P 500 in 2025. Technology and communication services—home to the so-called Magnificent Seven stocks—led the way. Yet even these giants no longer dominate the Nasdaq-100 individually. The index, weighted by market capitalisation, now reflects the collective influence of Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla rather than any single company's dominance.
The Nasdaq-100's current position, 6% off its record high, suggests investors may be adopting a more cautious approach. With technology lagging and fewer stocks holding above key moving averages, the index faces renewed pressure. Historical patterns indicate that such weakening momentum has often preceded deeper pullbacks in the past.
