Nvidia, AMD and Micron led a brutal AI selloff as the S&P 500 fell 4.4% and the Nasdaq slid into a correction
A day after the Dow's best session since April 2025, the post-election rally reversed. Chip and data center stocks took the worst of it, the VIX jumped 70% and Treasury yields fell.
Photo: Miguel Á. Padriñán / Pexels
Wall Street's post-election celebration lasted exactly one session. On Thursday the AI trade, which had already cracked underneath Wednesday's rally, gave way entirely. The chipmakers that led the market for most of the past two years posted some of their worst days of the year, and they took the major indexes down with them. The Nasdaq Composite closed in correction territory, more than 10% below the record it set last month, according to IBTimes and CNBC.
How the session ended
The S&P 500 fell 334.89 points, or 4.36%, to 7,353.73, The Asia Business Daily reported, matching Yahoo Finance data. The Dow Jones Industrial Average lost 1,833.06 points, or 3.44%, to 51,523.06, giving back more than all of Wednesday's 1,569-point gain. The Nasdaq Composite dropped 1,421.51 points, or 5.52%, to 24,314.99, and the Nasdaq 100 lost 6.36%, according to Barchart.
Barchart said the S&P 500 closed at a three-month low, the Dow at a three-week low and the Nasdaq 100 at a six-and-a-half-month low. The Associated Press said the S&P 500 had its worst day since President Donald Trump shook markets worldwide. The Cboe Volatility Index, Wall Street's fear gauge, jumped 69.66% to 28.18 from 16.61, according to Yahoo Finance data.
The chip rout
The biggest names in AI hardware fell hardest. Nvidia lost 9.26% to $181.60 and Broadcom 10.43% to $291.53, according to Yahoo Finance data; The Asia Business Daily put their declines at 9.19% and 10.64%. AMD dropped 17.26% to $404.40 and Micron 17.46% to $656.39, Yahoo Finance data show. Oracle fell 6.93%, and Qualcomm, which had reported results on Wednesday evening, lost 9.49%.
CNBC said the iShares Semiconductor ETF was down more than 9% at midday, with memory maker SanDisk off 20% and Astera Labs 15%. Data center suppliers slid for a second day: Lumentum, Corning, CoreWeave and nVent Electric were all down 12% to 14% at midday, according to CNBC.
Why the AI trade broke
The selling picked up where Wednesday left off. Democrats won control of both chambers of Congress on Tuesday and took key state races, including the Texas governorship, where Gina Hinojosa campaigned on a pause in new data center approvals. Barchart said investors were weighing speculation that a Democratic sweep could usher in a new era of regulation for the AI industry, and that public opposition to data centers could crimp growth for chipmakers and their suppliers.
Independent Sen. Bernie Sanders, who caucuses with Democrats, called for a nationwide halt to data center construction, The Asia Business Daily reported.
"Americans do not want the oligarchs of Big Tech to destroy the environment, eliminate jobs and threaten humanity's future." - Sen. Bernie Sanders, in a social media post quoted by The Asia Business Daily
Goldman Sachs analysts estimated this week that Democratic wins at the state and local level are likely to lead to short-term data center moratoria that could affect about 45% of planned U.S. data center capacity expansion, Reuters reported. Elon Musk's Tesla and SpaceX, both based in Texas, extended their own slide, falling 10.77% and 9.05%, according to Yahoo Finance data.
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Bonds, oil and gold
Investors moved into safer assets. The 10-year Treasury yield ended at 4.84%, down from 4.90% on Wednesday, and the 2-year at 4.46%, down from 4.58%, according to the Treasury Department's daily rates. CNBC said traders were also looking ahead to Friday's October jobs report.
Oil reversed part of Wednesday's plunge. U.S. crude for December delivery rose $2.40, or 2.72%, to settle at $90.52 a barrel, snapping a three-session losing streak, Dow Jones Market Data showed. Reuters, via CNA, tied the rebound to fresh attacks on tankers in the Gulf, while Barchart pointed to Ukrainian strikes on Russian refineries and tight diesel supplies.
Comex gold for November delivery gained $41.40, or 1.02%, to settle at $4,102.50 an ounce, its highest settlement since Oct. 21, according to Dow Jones Market Data. Spot gold traded around $4,120 during the U.S. session, according to USAGOLD and GoldTicker.
The Fed is still talking hikes
The rate outlook did not soften with the market. Richmond Fed President Thomas Barkin told CNBC he expects the central bank will have to raise interest rates further, though he is unsure by how much or how fast.
"Unemployment's near record lows, and inflation is too high. That means the path is pretty straightforward. The question, of course, is pace." - Thomas Barkin, Richmond Fed president, to CNBC
Overseas, the Bank of England raised its key rate by a quarter point to 4%, its first increase in more than three years, according to USAGOLD's daily market report.
Not everything fell
Earnings still lifted some stocks. AppLovin jumped 31.04% to $356.10 after its results, according to Yahoo Finance data and StockTitan, and EPAM Systems rose 21.55% after adding $1.5 billion to its buyback, StockTitan reported. Tripadvisor went the other way, down 22% at midday on a leadership shakeup and weak guidance, CNBC said.
What carries into Friday
The October jobs report arrives at 8:30 a.m. ET Friday. Economists polled by Dow Jones expect a gain of 59,000 jobs after September's 29,000, CNBC reported. After the close, Airbnb and Cloudflare rose in extended trading on their results while Atlassian fell, according to Investing.com. The bigger question for Friday is whether two days of selling in AI stocks has run its course or is still finding a bottom.
