Matthew Benjamin, The Motley Fool Fri, November 13, 2026 at 8:15 AM EST 2 min read ^GSPC -0.35% NVDA +1.65% Trade NVIDIA on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
Last Thursday -- Nov. 5 -- the S&P 500 (SNPINDEX: ^GSPC) index plunged 4.4%, its worst day since April 2025.
That seems pretty scary, certainly to newer investors who might not have seen many market pullbacks. But investors shouldn't worry, as occasional small corrections and pullbacks in the market undo excess and prevent larger corrections down the road. They're a normal, healthy way for the market to avoid asset bubbles and reset overextended valuations.
Missed AI's "Act 1"? Act 2 Could Be 16x Bigger. Most investors think they missed the AI boat because they didn't buy Nvidia in 2005. But according to our analysts, we're only at the end of "Act 1"—the R&D phase. "Act 2" is the global rollout. Continue »
The market's valuation had gotten quite high before the pullback. The Shiller cyclically adjusted price-to-earnings (CAPE) ratio reached 41 earlier this year, a high it's only seen once before in history and far above the 32 level seen just before the 1920 crash.
Market dips and minor corrections are extremely common, too. Research by CPA firm Adams Brown shows that between 1928 and 2024, there was at least one 10% correction per year on average, more than three 5% mild corrections, and about seven 3% dips.
Such market pullbacks can also create opportunities. They offer new, more attractive entry points for many stocks that were too expensive to consider before the market drop.
That's exactly why the market rebounded in the two trading days that followed the drop, as investors jumped back in to buy the dip and the market clawed back much of what it lost on Thursday.
There's an old saying on Wall Street: Small forest fires prevent large forest fires. Investors need to realize that volatility is the price we pay for strong gains, and look past minor dips.
Most investors think they missed the AI boat because they didn't buy Nvidia in 2005.
But according to our analysts, we're only at the end of "Act 1"—the R&D phase. "Act 2" is the global rollout, a massive technology build-out that Google's CEO says could be more profound than fire or electricity.
While everyone watches the chip designers, one "backbone" company provides the critical technology that Nvidia and AMD literally cannot function without. We've detailed this under-the-radar player in our new AI Playbook.
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The S&P 500 Recently Experienced Its Worst Day Since 2025. Here's Why Investors Shouldn't Worry. was originally published by The Motley Fool
