The Nasdaq Composite Just Plunged Almost 700 Points in One Day: Is a Stock Market Crash Imminent?

The Nasdaq Composite fell 694 points, or 2.6%, on October 22, 2026, its largest one-day decline since June. The drop revives a debate over how much downside risk is baked into a market that has rallied hard since 2022 on AI infrastructure spending.

Two valuation and leverage gauges are flashing caution. The S&P 500's CAPE ratio sits near 43, against a historical average of 17.44, meaning the index trades at roughly 2.5 times its long-run norm on that measure. Margin debt has reached a record $1.502 trillion.

Interpretation: stretched valuations paired with record borrowing can amplify selling when sentiment turns, since leveraged positions are forced to unwind into weakness. That is an inference from these two readings, not a forecast of what comes next.

The counterweight is history. The source notes that downturns are routine and typically resolve quickly, and that bull markets have lasted 3.6 times longer than bear markets on average. A single 2.6% session, while the biggest since June, does not by itself define a bear market.

The sell-off matters most for the mega-cap names that dominate Nasdaq weighting and AI-spending sentiment: NVDA, AAPL, AMZN, GOOG, GOOGL, META, MSFT and TSLA.