The technology-heavy Nasdaq fell 5.5 percent on Thursday, capping a 12 percent decline from its October peak and drawing comparisons to the dot-com unwind, EFN reported on Friday. In his column for the outlet, Jonathan Axelsson argued that the selloff is still best understood as a correction concentrated in a narrow group of companies rather than a broad market collapse.
Axelsson noted that Sweden's Stockholm exchange closed down just 0.1 percent and finished near record levels, a figure that understates the day for anyone who did not follow intraday trading. The sharper damage was done in the United States, where large amounts of value were erased during the session, according to EFN.
Why it matters
The episode tests whether investors can look past the pessimism around artificial intelligence and focus on what is actually moving. Axelsson's central point is that the pullback reflects a healthy repricing of companies and sectors that had been assigned very high valuation multiples, a situation that many other businesses do not share.
If that reading holds, the large sums poured into AI-related stocks could begin rotating into sectors that are performing well but have drawn less attention. Axelsson pointed to some consumer companies that had struggled and have started to move, along with a large group of small-caps with little connection to AI that investors had avoided while tech was the only trade that seemed to work.
The numbers behind the drop
Despite the fall, the Nasdaq remains up almost 5 percent since the start of the year, EFN reported. The broader S&P 500 and the Dow Jones, which carry less tech weight, are each up more than 7 percent.
Axelsson also placed the move in the context of this year's earlier swings. In June, the Nasdaq dropped just over 4 percent on AI anxiety, and in July a weak stretch brought six consecutive losing sessions and an index loss of more than 5 percent. Sentiment reversed quickly on both occasions, and new records followed in October, according to the column.
Other Swedish outlets framed Thursday differently. Aftonbladet described an AI-driven rout in the US market and used the word "panic"; Omni reported that the AI selloff was spreading alarm among wealthy investors. DI quoted Hagströmer saying the market had been waiting for a reason, while Dagens Nyheter noted it is impossible to know whether this is the start of a crash.
What would change the picture
Axelsson drew a line between the current episode and a sustained downturn. If the selling continues at the pace of 2000, when the Nasdaq fell more than 5 percent ten times in a single year, the dynamic shifts: other sectors and companies get hit almost regardless of how healthy they are.
Under those conditions, he suggested investors review their portfolios and their sector exposure. Those holding tech stocks that have performed extremely well can reasonably shift toward more defensive positions, in his view. Missing the top is painful, he wrote, but very few investors manage to sell there.
For anyone worried about a broader and more lasting decline — someone preparing to buy a home, for example — Axelsson said it may make sense to move a larger share of a portfolio into bond funds.
He also repeated a principle he said has almost always proven sound: keeping dry powder when markets are shaking. That is easy to say and still true, he wrote, because such periods are often when investors get the chance to buy good companies that have become far too cheap — a pattern he attributed to Warren Buffett, quoting the investor's advice to fear when others are greedy and be greedy when others are fearful.
The coming period will show whether the market can shake off the current mood or whether the selling broadens beyond AI names. Watch whether declines spread into the S&P 500 and Dow, and whether the rotation into consumer and small-cap stocks that Axelsson flagged continues.
