Wall Street’s $2.5 Trillion AI Rout: Is Mark Minervini Warning of a Bear Market?

By S. JHA

The Nasdaq’s plunge, collapsing semiconductor stocks and mounting doubts over artificial intelligence valuations have revived fears of a cyclical bear market. Minervini sees a possible 10–15% S&P 500 correction and a deeper Nasdaq decline, but the real question is whether investors are witnessing a temporary shakeout or the beginning of a prolonged downturn.

Mumbai, November 6, 2026 — Overnight, trillions of dollars of wealth vanished from the Wall Street on Thursday. Equity watchers termed the rout a brutal selloff. The meltdown came a day after when the Mid-term results induced rally had spurred a global market rally. Now, Asian markets have gone into deeper correction, raising a spectacle of a black Friday.

Wall Street’s technology-led sell-off has transformed fears of an artificial intelligence bubble into a broader market anxiety. On Thursday, the Nasdaq Composite plunged 5.5%, while the S&P 500 fell 4.4% and the Dow Jones Industrial Average declined 3.4%. The Nasdaq 100 lost 6.4%, wiping out approximately $2.5 trillion in market value. The Nasdaq Composite was already 11.9% below its October record, firmly in correction territory.

The damage was particularly severe among semiconductor and AI infrastructure companies. Nvidia fell 9.3%, while Advanced Micro Devices plunged 17.3%. The semiconductor index declined 12%, reaching its lowest level in more than six months.

The question now confronting investors is whether this represents an overdue correction in an overheated technology market or the beginning of a much deeper bear market.

Minervini’s Warning: The Worst May Not Be Over

Renowned trader Mark Minervini, commenting on X, warned that the market could be approaching a period of potentially prolonged instability.

“I don’t think we’re going to see an ‘87-style crash in percentage terms,” Minervini said, cautioning that the current decline could nevertheless trigger “some form of market meltdown” lasting a week or two.

His projections are sobering. Minervini estimates that the S&P 500 could decline 10–15% from its peak, with 20% representing a worst-case scenario. The Nasdaq, given its heavier exposure to technology and speculative growth stocks, could suffer a 20–25% decline.

He also suggested the possibility of a cyclical bear market resembling 1998.

Minervini’s most important warning concerns market psychology. If selling accelerates, he believes investors should disregard traditional oversold indicators. In other words, technical signals suggesting that stocks are cheap or due for a rebound may become unreliable when panic selling, forced liquidations and deteriorating liquidity take control.

Last week, the Indian equity markets had reportedly seen a margin call selloff. The situation arises when brokerages liquidate positions taken by traders on margins. This week Reliance Industries had emerged as the top margin bet in India on the back of a stellar quarterly result.

Why the AI Sell-Off Is Different

This is not simply a technology earnings disappointment.

Investors are questioning whether enormous investments in artificial intelligence infrastructure will generate returns sufficient to justify current valuations.

Big technology companies have committed billions of dollars to data centres, chips and computing infrastructure. However, rising borrowing costs, political opposition to data-centre construction and concerns about financing are creating uncertainty over the pace of expansion.

The recent US midterm election results have added another layer of anxiety. Investors fear increased regulatory scrutiny and restrictions that could slow infrastructure development.

The market is increasingly demanding evidence of profitability rather than rewarding promises of future AI growth.

Reuters reported that the semiconductor and data-centre sectors were experiencing aggressive institutional selling and deleveraging.

Lessons From 1987 and 1998

The 1987 crash remains the ultimate warning about market contagion. On Black Monday, October 19, the Dow Jones Industrial Average plunged 22.6% in a single session. The Federal Reserve subsequently intervened to support market liquidity, and stocks recovered substantially.

Minervini does not expect a repeat of that extraordinary percentage decline.

The 1998 comparison is more interesting. Following the Russian financial crisis and the collapse of Long-Term Capital Management, the Nasdaq entered bear-market territory, falling approximately 29.5% from its July peak to its October low. Yet the market recovered its previous peak before the year ended.

The episode demonstrated that a bear market need not become a prolonged economic depression. Financial conditions, policy intervention and investor confidence can determine how quickly markets recover.

Is a Prolonged Bear Market Now Inevitable?

Not necessarily.

A correction becomes a cyclical bear market when declines deepen, market breadth deteriorates and investors lose confidence in the earnings outlook. A sustained bear market would require additional damage from weakening corporate profits, tighter credit conditions or an economic slowdown.

The present sell-off has several warning signs: concentrated technology exposure, stretched valuations, aggressive selling and doubts about AI investment returns.

However, the broader economy has not automatically entered recession simply because technology stocks are collapsing.

The duration of this downturn will depend on whether investors regain confidence in AI profitability, whether financial conditions stabilise and whether selling spreads into sectors beyond technology.

Minervini’s 10–15% S&P 500 decline scenario may be plausible, but not inevitable. A 20% decline would mark a conventional bear market and could trigger a substantially different investment environment.

For investors, the immediate danger is not merely falling prices. It is assuming that every decline represents a buying opportunity.

Wall Street’s AI boom may not be over. But the era in which investors rewarded almost any company associated with artificial intelligence appears to be facing its most serious test.

The market is now asking a harder question: How much of the AI revolution has already been priced into equities?

(Disclaimer: This article is intended only for informational purposes. No trade or investment suggestions are here given.)

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