AI jitters? History points to more bumps ahead
QQQ•The Nasdaq 100 has fallen 10.4% from its October high, a decline resembling 17 historical periods; 94% were higher a year later, with an average gain of 23%, though some saw sharp losses before recovering.
1. Historical swings
A SentimenTrader study found that the Nasdaq 100’s 10.4% decline from its October high closely resembles 17 similar 65-trading-day patterns from the past two decades. While 94% of those cases were higher a year later, averaging a 23% gain, several had sharp swings along the way.
2. Volatility may persist
UBS says higher volatility is becoming the new normal as money managers brace for a more turbulent phase in the AI trade. SentimenTrader said it leans toward treating the decline as one that can be repaired over the next three to twelve months, rather than an established long-term decline. In a September 2008 example, the Nasdaq 100 fell more than 30% over the following six months before ending the year slightly positive.
