Are the Signs Pointing to Another Nasdaq-100 Correction?
The Motley Fool
by newsfeedback@fool.com (David Dierking)February 25, 2026
AI-Generated Deep Dive Summary
The article explores whether the signs suggest another potential correction in the Nasdaq-100 index. Despite the index reaching new all-time highs throughout 2024, a concerning trend emerged: fewer stocks were trading above their 200-day moving average by year's end compared to earlier months. This divergence raises questions about underlying market strength, as the index's performance has been heavily influenced by a small group of major tech stocks, often referred to as the "Magnificent Seven." Historically, similar patterns have preceded significant corrections, such as the one triggered by President Trump's tariffs in 2021.
The article highlights how, in 2021, the Nasdaq-100 and Invesco QQQ ETF experienced a bullish run fueled by economic recovery post-COVID-19 shutdowns and massive government stimulus. While the index showed resilience with only minor setbacks, it was later followed by notable corrections tied to geopolitical events like trade policies. The author draws parallels between 2021 and 2024, suggesting that a similar pattern of correction could unfold again if market conditions shift.
For investors, understanding these trends is crucial as it underscores the risks associated with relying on a narrow group of stocks to drive market performance. The article emphasizes the importance of diversification and staying vigilant for potential shifts in market dynamics. By examining historical precedents and current indicators, readers are encouraged to consider whether the Nasdaq-100's recent highs may signal an impending correction, making it a timely read for those navigating financial markets.
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Originally published on The Motley Fool on 2/25/2026