The recent AI sell-off has sparked fearmongering headlines, but compared to past stock market crashes, it is a mild correction for the S&P 500, which is 6% below its record. Tech sectors fell harder, with the Nasdaq down 11% and chip stocks down 36%, levels seen during the Covid crash. Tracking shows the S&P 500 has fallen 6% below its record close since 6 October 2026, the worst day since 4 April 2025.
Historically, four in five S&P 500 falls of 6% never reached -20%. US chip stocks (PHLX Semiconductor index) are down 36% from their 22 June record, as deep as their Covid fall. Recovery timelines vary: the S&P 500 took 7 years after dot-com, chip stocks 18 years.
The 1987 crash recovery was 1.9 years. The AI sell-off is at 1 month, -6% for the S&P 500 and -11% for the Nasdaq, not yet a crash. The S&P 500 technology weighting, now about a third, amplifies tech-led sell-offs compared to historical indices.
Source: Hacker News · Summarized by HeadlinesBriefing