Sharp Sell‑Off Pushes Nasdaq Into Correction as Valuations Reach Dot‑Com‑Era Levels

Overview

• U.S. equities suffered a steep one‑day decline with the S&P 500 down about 4.4% and the Nasdaq falling roughly 5.5%, a move that sent the Nasdaq more than 10% below its recent highs.
• The S&P 500’s cyclically adjusted price‑to‑earnings ratio (CAPE) closed above 41, a level the coverage links to previous market excesses and that is well above its long‑run average.
• Commentary argues that high valuations increase downside risk and points to the long history of bear markets since 1929 as the basis for the view that another severe downturn is likely at some point, though timing cannot be predicted.
• The Motley Fool article urges dividend investors to follow Warren Buffett‑style preparedness and outlines three specific defensive moves intended to protect income portfolios ahead of a larger slide.
• Market context includes an earlier AI and semiconductor sell‑off and rising Treasury yields, which together make fixed‑income and broader diversification more attractive and could lead investors to reweight away from high‑growth tech names and toward safer income sources.