US stocks fell sharply on Thursday, November 5, reversing the previous session’s gains as a broad selloff in technology and semiconductor shares weighed on Wall Street.
The S&P 500 declined 2.6%, while the Nasdaq Composite plunged 4.1%, trading more than 10% below its October record high, a threshold commonly used to define a market correction.
The Dow Jones Industrial Average lost more than 800 points during the session, erasing much of Wednesday’s post-election rally.
The decline followed the Democratic Party’s victory in both chambers of Congress, as investors assessed the potential implications for technology regulation and artificial intelligence infrastructure investment.
Semiconductor Stocks Lead Market Declines
Chipmakers recorded some of the session’s steepest losses as concerns intensified over the pace of AI-related capital spending.
Nvidia shares fell 7.1%, while Broadcom declined 8%. Micron Technology dropped more than 13%, Advanced Micro Devices (AMD) plunged 14%, and Applied Materials lost 10%.
Tesla also extended its recent decline, falling 9.6%.
Qualcomm shares dropped nearly 12% after the semiconductor company issued a weaker-than-expected profit outlook, adding to pressure across the industry.
The losses reflected renewed concerns about semiconductor demand, valuations and the potential effects of slower data center expansion.
Investors Assess AI Regulation and Economic Outlook
The Democratic victory in the US midterm elections has raised expectations of greater congressional scrutiny of AI infrastructure development, including the construction and operation of data centers.
Investors are evaluating whether additional regulatory requirements could affect the pace of investment by technology companies and demand for advanced semiconductors.
Selling pressure extended beyond technology stocks, with consumer discretionary, industrial and communication services companies also recording declines.
Consumer staples shares proved relatively resilient, outperforming the broader market during the session.
The market reversal came as investors continued to assess corporate earnings, inflation pressures and the outlook for Federal Reserve interest rates.
Thursday’s trading reflected a broad reduction in exposure to technology and AI-related equities, with semiconductor companies accounting for some of the largest individual declines. Market participants remained focused on economic data and potential policy changes affecting the technology sector.
