Nasdaq Composite slides to 7-day low as profit-taking hits major tech stocks

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Sholanke Dele

05.11.2025

Nasdaq Composite slides to 7-day low as profit-taking hits major tech stocks — Nasdaq retreats 2% to 23,340

The Nasdaq Composite Index has entered a corrective phase after an extended rally that lifted the benchmark to record highs above 24,000. On Tuesday, the index dropped 2% to a seven-day low of 23,340, extending its retreat from the all-time high. The Nasdaq futures fell another 1% in Wednesday’s premarket session, tracking broad weakness across global technology shares. The selloff has driven volatility to levels last seen in April as investors take profits from a prolonged AI-driven rally.

- Nasdaq retreats 2% to 23,340 as AI-focused stocks trigger a global tech selloff.

- 23,000 Fibonacci zone, key support as traders assess valuation reset across major equities.

- Nvidia and Palantir losses intensify profit-taking pressure after a seven-month Nasdaq winning streak.

Market sentiment shifted sharply following remarks from top Wall Street executives warning about stretched equity valuations. The CEOs of Goldman Sachs and Morgan Stanley both questioned the sustainability of current price levels, suggesting that an AI valuation correction may be underway. After seven straight months of gains and a 50% surge from April lows, analysts see the latest pullback as a natural adjustment following an overheated run.

Nasdaq price dynamic (Aug - Oct 2025). Source: Tradingview

The selloff was amplified by weakness in major technology names. Nvidia, the world’s most valuable company, dropped nearly 4% on Tuesday and is now down about 7% from last month’s peak. Palantir Technologies, one of the market’s high-growth AI darlings, lost 8% after posting strong financial results that were met with an unexpectedly negative reaction. The pullback in these heavyweights dragged the broader index lower, showing how dependent Nasdaq’s trajectory has become on a narrow cluster of AI-focused leaders.

Nasdaq pullback driven by stretched AI valuations after record April-to-October surge

According to Matt Simpson, Senior Market Analyst at StoneX in Brisbane, “when you consider the Nasdaq rallied for seven consecutive months and added more than 50% from its April low, the current selloff is a mere nudge in the grand scheme of things. At some point, profits need to be booked.” His comment reflects a broader market view that the rally may have advanced too quickly, leaving room for a technical cooldown before the next leg higher.

Technically, the 23,000 region is acting as key short-term support. This level capped the previous all-time high on October 10 and now coincides with the 50% Fibonacci retracement zone, reinforcing its importance as a pivot point. A decisive break below that level could open the path toward 22,500, while a rebound from it may signal renewed strength once market sentiment stabilises.

In essence, the Nasdaq’s retracement reflects an overdue realignment between stretched valuations and profit-taking pressure. Unless earnings momentum and macro conditions reassert confidence, the index may continue to trade defensively near its 23,000 support before attempting to rebuild upward momentum.

We discussed Nvidia leading tech stocks higher after revealing $500 billion in AI chip bookings. Fed’s expected rate cut and strong earnings were projected to push the Nasdaq toward the 25,000 milestones.

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