Nasdaq headed for biggest weekly loss since April 2025

American technology stocks will take a big hit on Wall Street on Friday. The Nasdaq 100 has fallen by almost 3 percent, heading for its biggest weekly loss since April 2025.

In just ten days, more than $3 trillion in market capitalization at US tech companies has evaporated. Due to the ongoing wave of sales, the Nasdaq is also getting closer and closer to an official stock market correction.

The losses bring the Nasdaq 100, in which large technology companies such as Apple, Microsoft and Nvidia weigh heavily, ever closer to an important limit. The index is still about 2.5 percent away from an official stock market correction.

On the stock market, one speaks of a correction when an index is at least 10 percent below its most recent peak. If the decline continues, the Nasdaq 100 may soon enter the correction area.

That would be a striking change for a sector that has benefited greatly from the enthusiasm around artificial intelligence (AI) in recent years. For a long time, investors were willing to pay high amounts for technology stocks, expecting AI to generate huge future profits.

Now there is growing doubt as to whether those expectations can be met. The recent wave of sales shows how quickly confidence can shift when investors are concerned about the valuation of large tech companies.

A major source of uncertainty is the huge investment in AI. Big tech companies are pouring billions of dollars into data centers, high-performance chips and other infrastructure, while it is not yet clear how quickly these expenditures will generate sufficient profits.

Companies that finance their expansion with borrowed money are particularly vulnerable. When the returns are disappointing, investors may wonder whether the high stock market valuations are still justified.

US interest rates also play a role. If interest rates remain high for longer, borrowing money becomes more expensive and relatively safe investments, such as government bonds, become more attractive. That can hit technology stocks extra hard, as their value is often highly dependent on profits that are only expected in the future.

The combination of high investment costs and uncertainty about interest rates makes investors more cautious. As a result, price declines at some large technology companies can quickly spread to the rest of the sector.