Nasdaq plunged 5.52% on Thursday, 5 November (as much as 5.73% intraday), as investors dumped chip and AI stocks, wiping out the post-election rally and pushing the tech-heavy index into correction territory.

Key Points

  • Nasdaq fell 5.52% on Thursday 5 November (as much as 5.73% intraday), entering correction territory — 11.9% below its record high.
  • The PHLX Semiconductor Index fell 12.25%, its worst fall since March 2020.
  • The S&P 500 fell 4.36% and the Dow lost 1,833 points, erasing Wednesday’s post-election rally.
  • Nvidia fell 9.3%, Qualcomm 9.5% after weak smartphone-chip guidance; Tesla fell 10.8% and Bitcoin dropped 5%.
  • About $2 trillion in chip-stock market value was wiped out in the sell-off.

What Happened

Just one day earlier, Wall Street had cheered the midterm results. On Wednesday, the Nasdaq gained 1.44%, the Dow jumped 3% and the S&P 500 rose 1.6% as investors welcomed the end of election uncertainty. Thursday reversed all of it — and then some.

The selling was concentrated in semiconductors and the companies building the infrastructure behind the artificial intelligence boom. The PHLX Semiconductor Index, which tracks the biggest chipmakers, fell 12.25%. Nvidia, the chip giant at the centre of the AI boom, fell 9.3%. Qualcomm dropped 9.5% after warning that smartphone-chip sales were weaker than expected. Tesla fell 10.8%, and Bitcoin dropped 5%.

Traders pointed to the midterm results themselves. Democrats swept both chambers of Congress and won key races in states that host the data centres powering AI, including Texas. Investors began pricing in a less friendly climate for the data-centre buildout — tighter rules, more oversight and possible project delays. No new law was passed and no project was cancelled on Thursday, but the market sold first and asked questions later. Wall Street’s fear gauge, the VIX, surged about 70% to 28.18, its highest level in seven months.

Why It Matters

A correction means an index has fallen more than 10% from its recent high, and the Nasdaq crossed that line on Thursday. It was the index’s worst day since the April 2025 tariff sell-off, according to the Associated Press, and the chip sector was on track for its worst week since the same April rout.

The scale of the losses is what stands out. Roughly $2 trillion in market value was wiped from chip stocks alone, according to Yahoo Finance. The sell-off also tests the story that has driven markets higher for two years: that spending on AI chips and data centres can keep growing almost without limit. If the new Congress slows that buildout, the earnings outlook for the market’s biggest winners changes with it — and that reaches far beyond Wall Street, into the pension funds and retirement savings that hold these shares.

What Happens Next

Investors will watch Friday’s open closely for a bounce or a deeper slide. The focus then turns to Washington: House Republicans pick their new leader next week, and the new Democratic majorities will set out how tough they plan to be on data-centre rules and AI oversight. Until that picture clears, chip stocks are likely to stay volatile.

Source: CNN, The National, Bloomberg | 6 November 2026