Nasdaq's 2025 slump echoes past crashes—is another bear market coming?
The Dow Jones Industrial Average is struggling in 2025, sitting 6% below its record peak. Technology, once the market's star performer, has become the worst sector in the S&P 500 this year. Investors are now watching for signs of a deeper downturn.
In early 2025, the Nasdaq-100 saw strong gains, driven by the so-called Magnificent Seven stocks. Companies like Nvidia, Tesla and Microsoft pushed the index higher, alongside the technology and communication services sectors. By the second quarter, the number of Nasdaq-100 stocks trading above their 200-day moving average reached its highest point.
Since then, the trend has reversed. Fewer stocks now hold above that key level, mirroring a pattern seen in 2024. Back then, a steady decline in stocks above their 200-day average came before a sharp 20% drop in the Nasdaq-100. That crash followed President Donald Trump's Liberation Day tariffs, which rattled markets.
A similar warning sign appeared in 2021. A drop in stocks above their 200-day average preceded a bear market in the Nasdaq-100 and the QQQ ETF. Rising inflation and the Federal Reserve's slow response worsened the sell-off at the time.
The current decline in stocks above their 200-day average has raised concerns about another bear market. With technology underperforming and investor caution growing, the Nasdaq-100 faces further pressure. Analysts are closely monitoring whether history will repeat itself.
