March 28, 2026

• less than 3 min read

For three years, tech behemoths have been fueling a bull market on the promise that AI advancements will increase efficiency and profitability. But with investors growing skeptical, and with the continued war in the Middle East, the Nasdaq is now in correction territory after its worst week in nearly a year:

• The index is down 11% since it peaked in October and is doing its best New York Giants impression with 10 weekly losses over the past 11 weeks.
• Two of the biggest drains since late-October are two of the biggest spenders in AI computing—Microsoft (down 34%) and Meta (down 29%).
• Even Nvidia, the AI chipmaker that has everyone throwing money at it like it’s in one of those windy cash booths, is down nearly 20% from its October high.
• As a group, Magnificent Seven shares are down 8% since late October.

Microsoft is having its worst quarter since the 2008 global financial crisis. The stock is down 25% as shareholders recoil from the company’s move to continue spending on AI infrastructure. There are also fears that startups like OpenAI and Anthropic will create agents that can replace products made by companies like Microsoft.

Tech’s slide is in keeping with the market as a whole. Remember when US Attorney General Pam Bondi let the world know the Dow was over 50,000 at a congressional hearing in February? After dropping nearly 800 points yesterday, it, too, fell into correction territory from its record high on Feb. 11.

TACO is growing stale

On Thursday, President Trump extended the deadline for peace negotiations with Iran by 10 days. However, markets didn’t rebound like they had in similar situations that have spurred the so-called TACO trade (an acronym for Trump Always Chickens Out).

Instead, crude prices soared to $110 per barrel yesterday, stoking inflation fears. This could be because, while Trump backed down, Israel threatened escalation, and Iran has been resistant to peace talks. Analysts believe the TACO tactic is carrying less weight due to the disconnect between the US and Iran.

But…Big Tech stocks could be viewed as a relative bargain, and a resurgence would almost certainly translate into good news for the markets overall.—DL

Become smarter in just 5 minutes

Morning Brew delivers quick and insightful updates about the business world every day of the week from Wall St. to Silicon Valley.