Has the Nasdaq Roller Coaster Peaked?

Market Overview - The NASDAQ has experienced significant volatility in 2025, with a year-to-date increase of nearly 20% following a 25% decline from February to early April [1] - Initial market negativity was driven by concerns over economic and trade policy changes under the new administration, but focus has since shifted [1] AI and Sector Performance - AI remains a dominant theme in the market, expanding beyond chip makers to include companies that can leverage AI effectively or are potential takeover targets due to substantial investments from big tech [2] - The utilities and energy sectors have also seen growth, driven by anticipated future power demands related to AI and quantum computing [2] Federal Reserve Actions - On September 17th, the Federal Reserve cut rates by 25 basis points, despite inflation remaining around 2.7% [3] - The prevailing expectation is that the Fed will continue to ease monetary policy into 2026 to address a weakening labor market [3] Market Risks - Even strong fundamentals do not protect markets from becoming overextended, which can lead to sharp declines [4] - Historical context is provided by the internet boom of the early 2000s, where the NASDAQ lost over 75% of its value before recovering in 2002 [4]