The Nasdaq Composite Index dropped 3% in the past month and is now down 5.9% YTD in 2026. The sideways chop/consolidation pattern ended with the correction over the past two months.

The index fell through all key EMA support levels, including the 200-day EMA that is typically strong support. The Nasdaq did find support at a major trend line and bounced off oversold levels. The RSI briefly fell to under 30 (oversold) before the recent bounce. However, the bounce has fallen short of reclaiming the 200-day EMA, so I imagine this is nothing but a temporary relief rally on false hopes of an end to the war in Iran.

At any other time, I would be an aggressive buyer of this dip. I believe in disruptive technology growing value and think the efficiencies of artificial intelligence are going to be a game changer to productivity.

But I also think that investors are underestimating the impact of the war in Iran and the likelihood that higher energy prices will be here for quite some time. This also translates into higher food prices, higher travel prices, higher consumer goods prices, exploding debt levels, and many other ripple effects. One of which is supply disruptions to helium production/transportation, which is essential to the manufacturing of semiconductors needed in most technology applications and critical to realizing the efficiency benefits of AI.

Plus, Iran is targeting data centers in the, which has the knock-on effect of disrupting private credit markets. And this comes at a time when market data was starting to take a turn for the worse, including private credit defaults hitting all-time highs. Redemption requests are soaring and banks are blocking or limiting withdrawals.

As a reminder, the tech/growth sector is particularly exposed to these types of risks, as many are pre-revenue and rely on raising capital to sustain operations.

Takeaway: The markets hate uncertainty and having their fate rest in the hands of a few leaders makes investing all the more difficult. I believe the correct course of action is to get more defensive, reduce exposure and be ready to withstand a prolonged period of higher costs and uncertainty in the markets. There will still be winners, particularly in AI, but the growth trajectory has definitely slowed.