The Nasdaq Composite fell 5.52 percent on Thursday 5 November to close at 24,315, its worst day since April 2025, as a rout in AI and chip stocks pushed the index into correction territory. The Dow Jones Industrial Average lost 1,833.06 points, or 3.44 percent, to 51,523.06, and the S&P 500 dropped 4.36 percent to 7,353.73. CNN put the loss in Nasdaq market value at roughly $2.5 trillion. All 11 S&P 500 sectors finished lower.
How the day unfolded
The Philadelphia Semiconductor Index fell 12.25 percent to 9,011.14, according to Yahoo Finance's market data, which CNN described as its worst day in about six and a half years. The Nasdaq-100 fell 6.36 percent, its worst day since March 2020. The Nasdaq now sits more than 10 percent below its record close of 6 October, which is the usual definition of a correction.
| Index | Close | Change |
|---|---|---|
| Nasdaq Composite | 24,315.00 | -5.52% |
| S&P 500 | 7,353.73 | -4.36% |
| Dow Jones Industrial Average | 51,523.06 | -3.44% |
| PHLX Semiconductor Index | 9,011.14 | -12.25% |
Individual stocks took heavy hits. Nvidia fell about 9.3 percent, which CNN said erased its gains for the year. Qualcomm dropped 9.5 percent after missing estimates on Wednesday and saying higher memory chip costs were hurting sales. CoreWeave fell roughly 10 percent and Nebius roughly 15 percent. Tesla and SpaceX each lost roughly 9 to 11 percent, with outlets giving slightly different figures. The Dow's fall erased Wednesday's gain of 1,569 points, when stocks had rallied after the midterm elections.
What triggered it
No single event explains the move, and the reasons below are analyst interpretation rather than confirmed cause. The most cited trigger is politics. Democrats won control of both chambers of Congress, and investors fear that rising electricity prices and a push to restrict or pause data centre construction will slow the AI buildout. CNN noted that Texas governor-elect Gina Hinojosa campaigned on a temporary data centre moratorium and an end to certain tax incentives for builders. Amazon, Meta and Google shares had risen on Wednesday on hopes that lower spending would lift profits, then fell on Thursday as investors judged the restrictions a net negative.
Jakub Rochlitz of eToro said the market's reading is that the AI infrastructure buildout "will become slower and more expensive," as quoted by Fox Business. Jed Ellerbroek of Argent Capital Management told Reuters, "This feels like the capitulation phase for the data center capex beneficiary stocks, especially the semiconductors."
Others point to positioning. Yahoo Finance reported that Nomura's Charlie McElligott attributed the move mainly to hedge funds locking in profits on 2026's best performers before year end, not to a fundamental deterioration. Ed Yardeni, quoted by CNN, said investors want a slowdown in the AI buildout because it was "too frenzied and speculative." The Nasdaq also broke below its 200-day moving average.
Fear gauge and money flows
The VIX volatility index closed at 28.18, up about 70 percent, which CNN called its biggest one-day jump in almost two years and a seven-month high. Yahoo Finance cited Vanda Research data showing retail investors were on course for their biggest net-selling day since March 2020, with no sign of buying the dip in individual stocks, though some bought leveraged funds such as TQQQ and SOXL. Investors moved towards safety, and the 10-year Treasury yield fell to 4.84 percent, its lowest in about two months. Bitcoin fell about 5.4 percent to roughly $76,115.
Not everyone is bearish. Keith Lerner of Truist said the risk and reward is improving for longer-term investors, and Apollo's Torsten Sløk noted that S&P 500 earnings were up nearly 40 percent from a year ago. Even after the fall, CNN reported the S&P 500 was still up about 7.4 percent for 2026 and the Nasdaq up about 4.6 percent.
Why it matters beyond Wall Street
The selloff follows a run of strong AI numbers. AMD reported record revenue on data centre demand, and Marvell agreed earlier this week to buy Lumentum for about $115 billion, which suggests the doubt is about how long spending can keep rising, not about current demand. It also lands on a funding market already wobbling: the Financial Times reported that OpenAI had trimmed its fundraising target, which we covered, and Anthropic has filed to go public. A lasting slide in AI valuations could change how much capital these companies raise and on what terms. Qualcomm's warning about memory costs fits a pattern we have reported across phones and PCs, where pricier memory is squeezing margins and pushing up device prices.
What to watch next
The first test is Friday's US employment report for October. Economists expect about 65,000 new jobs and an unemployment rate holding at 4.2 percent, according to Greek City Times, and the data could influence expectations for Federal Reserve policy. Beyond that, watch whether the Nasdaq holds near its 200-day average, whether Nvidia and the semiconductor index stabilise, and what Congress and state governments actually propose on data centre power and construction, since the market is currently pricing proposals rather than laws. Further earnings from AI infrastructure companies will show whether the spending plans behind the buildout have changed.
Published 6 November 2026. Gadgets365 will update this article as more information becomes available.
