The IT sector has entered a correction phase, with the "Wall Street fear index" hitting a 5-month high

The information technology sector on the U.S. stock market has entered a correction phase: in less than a month, it has fallen more than 10% from its record high, Barron's reported.

The S&P 500 Information Technology Index fell 2.7% at the close of trading on Monday, November 2. The Nasdaq Composite Index, in which technology companies are heavily weighted, lost nearly 1.1%, while the Nasdaq 100 Index fell 1.4%. The Nasdaq 100 is now 10% below its October peak—it is also in a technical correction zone, Bloomberg noted.

The S&P 500 broad-market index fell 0.5%, while the Dow Jones Industrial Average, a blue-chip index, managed to rise 0.4%. Tech stocks started the day in positive territory but were unable to hold on to those gains until the market closed: at its peak during the day, the Nasdaq Composite was up 1.4%.

The CBOE Volatility Index (VIX), known as the “Wall Street fear index,” rose 9.7% by the close of trading—to approximately 21.29 points. This is the highest closing level since June 10, MarketWatch noted.

The price of Brent crude fell by more than 8% on Monday, dropping below $104 per barrel. WTI crude fell by roughly the same amount: at its intraday low, it traded at $95.15 per barrel. Investors are hoping that the U.S. and Iran will be able to avoid an escalation of the conflict following the U.S. midterm elections.

The sell-off of chipmakers’ stocks affected the performance of U.S. stocks, overshadowing the decline in oil prices, according to Bloomberg. The Philadelphia Semiconductor Index fell 3.37 percent; its losses over the last three trading days have reached 12 percent, the agency calculated. Apple shares fell 1.8% ahead of its fourth-quarter earnings report. Nvidia and Meta shares each lost 1.3%. Oracle shares plummeted nearly 9% following the company’s decision to raise $20 billion for investments in AI. Marvell Technology shares plummeted 12.7%, and Lumentum shares fell 18.6% following news of a deal in which Marvell will acquire Lumentum for $115 billion.

"This is going to be an extremely interesting week in the [stock] markets. We’ll have to navigate domestic political and geopolitical issues. Moreover, growing doubts about the return on investment in AI are likely to have a greater impact on the market’s future direction than historical trends,” said Matt Mealy, senior market strategist at Miller Tabak (as quoted by Bloomberg).

This article was AI-translated and verified by a human editor