The Nasdaq Composite dropped 2.4% on Thursday, a move that leaves the tech-heavy index down nearly 11% from its record-high close on October 29 and confirms that the market has entered a correction. The retreat was part of a wider Wall Street downturn fuelled by uncertainty about the U.S. and Israeli war with Iran.
In recent sessions the Nasdaq has experienced its steepest contraction since April 2025, when markets were roiled after a major global tariff announcement. That earlier episode produced an almost 23% decline from the 2024 record-high close through April 7, 2025, before the index recovered and climbed back to record levels by last October.
The latest slide highlights heightened volatility for investors and underscored the susceptibility of high-growth technology names. Stocks that had surged in recent years on optimism around AI, including Microsoft, Alphabet and Nvidia, came under pressure as sentiment shifted.
Market participants cited concern that the conflict in the Middle East could inflict broad economic damage, and that fear has permeated risk assets. The Nasdaq is now down nearly 8% year to date in 2026 and is trading at its lowest level since early September 2025.
Among the heaviest drags on Thursday's Nasdaq performance was Meta Platforms, which plunged 7.9% after two verdicts found the company liable for harm to young users. Those legal outcomes have sparked worry that Meta may need to substantially alter its advertising model, a core revenue engine for the company.
Summary of developments
- The Nasdaq Composite fell 2.4% on Thursday and is nearly 11% below its October 29 record-high close, confirming a correction.
- Recent losses represent the most pronounced downturn since April 2025, when markets reacted sharply to a global tariff announcement.
- Macro concerns linked to the U.S. and Israeli war with Iran and legal rulings affecting Meta weighed on investor sentiment, hitting technology and advertising-linked equities hardest.
Key points
- Technology sector: Major AI-exposed names including Microsoft, Alphabet and Nvidia showed increased vulnerability as the Nasdaq pulled back.
- Market breadth: The Nasdaq's correction signals elevated volatility and renewed risk-off positioning among investors across equities.
- Advertising and social media: Meta Platforms' 7.9% decline after adverse verdicts highlights legal and regulatory risk for companies reliant on digital advertising.
Risks and uncertainties
- Geopolitical risk: Ongoing uncertainty about the U.S. and Israeli war with Iran could deepen the selloff if investors expect the conflict to impair global economic activity.
- Market trajectory: It is unclear whether the current decline is a transient pullback similar to the post-2025 recovery or the beginning of a prolonged risk-off period tied to the conflict.
- Company-specific legal risk: Verdicts holding Meta liable for harm to young users introduce uncertainty for its advertising business and broader revenue prospects.
Investors face a volatile environment where macro-geopolitical shifts and company-level legal outcomes are combining to pressure growth-oriented and AI-exposed equities. The Nasdaq's move into correction territory underscores the need for market participants to monitor both the trajectory of the regional conflict and subsequent legal and regulatory developments that could affect major technology and advertising-focused firms.