Nasdaq Falls Into Correction as a Chip Rout Hands Stocks Their Worst Day Since April 2025

The Nasdaq Composite fell 5.52% on Thursday to close in correction territory, more than 10% below its October record, as chip stocks suffered their worst day since March 2020.

A rally reversed in a day

The S&P 500 closed at 7,353.73, down 334.89 points, or 4.36%. The Dow Jones Industrial Average fell 1,833.06 points, or 3.44%, to 51,523.06.

All three major indexes posted their worst single-day percentage declines since April 4, 2025. The losses more than erased Wednesday's post-election rally, when the Dow gained 1,569.40 points.

The Nasdaq 100 fell 6.36% to 26,629.81, its sharpest drop since March 2020. It closed 14.7% below its October 6 record close (TickerGrove calculation).

Small caps fell with the rest. The Russell 2000 lost about 4.3% to roughly 2,735.

The chip index's worst day since the pandemic panic

The PHLX Semiconductor Index, the main U.S. chip benchmark, plunged 12.25% to 9,011.14. Dow Jones Market Data called it the index's worst day since March 16, 2020.

SanDisk fell 22.3% to $806.43, the S&P 500's worst performer. Advanced Micro Devices lost 17.3% to $404.40, and Micron Technology fell 17.5% to $656.39.

Marvell Technology dropped 16.4%. Nvidia fell 9.3% to $181.60, losing $447 billion of market value in a day, according to Dow Jones Market Data.

Tesla closed down 11% and SpaceX down 9%. All 11 S&P 500 sectors lost ground.

Why the winners' rally turned

Wednesday's rally celebrated the end of election uncertainty. Thursday repriced what the result could mean for the AI buildout.

Reuters reported that chip and data-center stocks slipped after the Democrats' victory, including in key data-center states where opposition to the industry's rapid expansion is growing. Dozens of ballot initiatives passed Tuesday stand to limit building in coming months and years, Reuters reported.

Candidates who opposed data-center expansion, some campaigning on moratoriums, won in Texas and Georgia. Investors also weighed whether the enormous sums pouring into AI infrastructure will earn their cost.

Qualcomm's weak smartphone-chip sales, reported before the open, gave the selling a company-specific start. The Nasdaq lost about $2.5 trillion of market value in the session, by the Wall Street Journal's count.

Oil jumped while safety paid

Oil reversed part of Wednesday's plunge on reported fresh attacks on tankers. U.S. crude settled at $90.52 a barrel, up $2.40, or 2.72%, and Brent settled at $98.29, up 3.88% (Reuters settlements).

The 10-year Treasury yield fell to about 4.82%, from 4.89% on Wednesday, as investors paid for safety. Front-month Comex gold settled at $4,102.50 an ounce, up 1.02%.

The VIX, Wall Street's volatility gauge, jumped about 70% to 28.18. MarketWatch put it at its highest close since March 30, 2026.

What remains unknown

One session does not settle whether this is a reset or a regime change. The AI trade has absorbed sharp selloffs before and recovered; it has also, in past cycles, kept falling.

Unknowns that matter: whether the incoming Congress turns campaign language on data centers into law, whether AI spending guidance survives the next earnings round, and whether Friday's selling, if it comes, stays orderly.

What to watch: the Bureau of Labor Statistics publishes the October jobs report on Friday, November 6, at 8:30 a.m. Eastern time. Economists surveyed by Dow Jones expect about 59,000 jobs added, with unemployment holding at 4.2%.