FILE - In this Friday, Feb. 17, 2017, file photo, an American flag hangs on the front of the New York Stock Exchange hours after the market closed, in New York. Technology and health care stocks are leading U.S. market indexes slightly higher in early trading on Wall Street, Wednesday, June 7, 2017. (AP Photo/Peter Morgan, File)
A crack has finally formed in the foundation of the US bull market. Now investors must decide if any structural damage has been done.

This year’s hottest stocks, companies from Facebook and Apple to Netflix and Nvidia, buckled on Friday, spurring losses that sent the Nasdaq 100 to its biggest rout relative to the Dow Jones Industrial Average since 2008. Accounts of what spurred it ranged from bearish tweets by a short seller to a cautious note from Goldman Sachs Group.

In its most benign interpretation, the sell-off was merely a rotation, counterbalanced by rallies in industries such as banks, energy producers and retailers. But the reversal was enough to spur soul searching among bulls who have watched the market value of Apple, Alphabet, Microsoft, and Facebook increase by $500billion (R6.45trillion) since December.

“We are probably going to see additional selling pressure on some high-momentum stocks that have spearheaded the rally,” said Chad Morganlander, a money manager at Stifel, Nicolaus & Co. “Stocks have become overbought.”

Even with the decline, the Nasdaq 100 remains up 18percent in 2017, more than twice as much as the S&P's 500, and trading at a significant valuation premium. The index’s price-earnings ratio was 26.1points as of Friday’s close, more than four percentage points above the broader gauge. That’s the widest gap in more than a year. One recent bull withheld judgment on whether the rout foretold worse pain to come.

Friday’s losses were significant in the tech space. Even as the Dow eked out an 89-point gain in New York, the Nasdaq 100 slid 2.4percent, trimming a decline that at one point reached 3.8percent, the most in a year. Within the S&P's 500, tech shares also trailed the full index by the most since 2008 as investors took profit in an industry whose gains this year to Thursday had almost tripled.

Perhaps the worst moment for bulls came just before 3pm in New York, when already-weakened shares of plunged almost 5percent in a matter of seconds, only to quickly recoup their losses. Less pronounced swoons were visible around that time in charts of Apple, Netflix and Facebook.