The Nasdaq Composite plummeted 3.9% on Thursday, erasing gains from the previous day as investors accelerated a selloff in technology stocks following the U.S. midterm elections. The tech-heavy index dipped into correction territory, trading more than 10% below a record set last month.
Investors retreat from artificial intelligence trade
The market decline was driven by a broad withdrawal from companies linked to artificial intelligence infrastructure. Investors are concerned that a Democratic sweep of both chambers of Congress, alongside victories in key gubernatorial races, could lead to increased regulatory scrutiny of the AI buildout across the country. The S&P 500 fell 2.8%.
The weakness was widespread across the sector. Chipmakers Broadcom and Nvidia each fell 6% on Thursday, while software stock Oracle also declined by 6%. Qualcomm reported earnings that beat estimates, but the stock dropped 11% due to a weaker-than-expected earnings outlook. The iShares Semiconductor ETF (SOXX) fell 8%.
CoreWeave lost 9%, Nebius slid 13%, and Iren shed 14%. Utilities and equipment suppliers that benefited from data center expansion, such as GE Vernova and Constellation Energy, traded lower, with GE Vernova sinking 9.1%.
Dow drops sharply amid tech sell-off
By Thursday, the Dow had shed 1,153 points, or 2.2%, as gains in stocks like Chevron and Johnson & Johnson could not offset the broader tech selling spree.
It's about tone and tenor from the party that did really well, incredibly well, at the federal level and at the state level, Tim Holland
Amazon CEO Andy Jassy addressed the spending cycle, stating, We still expect 2026 cash [capital expenditures] of approximately $220 billion.
Crude oil prices rise after election
U.S. crude oil prices reversed course on Thursday, recovering from a decline the previous day as investors reacted to the results of the midterm elections. On Thursday, West Texas Intermediate futures rose more than 2% to just above $90 a barrel, while Brent crude futures gained more than 2% to around $97. Uncertainty remains regarding the duration of the conflict in the Middle East and its impact on the global energy industry.
Internationally, markets felt similar pressure; South Korea’s Kospi index tumbled 5.3%, while Japan’s Nikkei 225 sank 1.8%.