Wall Street experienced a sharp sell-off on Thursday (Nov 5) as investors offloaded shares in technology companies and firms linked to the artificial intelligence (AI) industry. The S&P 500 plummeted by approximately 4%, the Nasdaq Composite slid nearly 6%, and the Dow Jones dropped by more than 1,500 points—wiping out most of the gains from the previous session.
The heaviest pressure fell on the semiconductor sector, following a Democratic Party victory in the US midterm elections, which fueled concerns over potential stricter regulations. Investors fear that new policies could slow the construction of computing centers—the critical infrastructure required for AI development.
The sell-off broadened as the market began to question the scale of corporate spending on AI infrastructure. Should data center expansion stall or regulations tighten, technology companies could face project delays and downward pressure on their earnings growth outlooks.
Chip stocks were hit the hardest. Nvidia fell by about 8.5%, Broadcom dropped more than 9%, while Micron and AMD each tumbled by nearly 15%. Applied Materials fell by over 11.5%, and Lam Research plunged nearly 14%.
The pressure extended beyond chipmakers. Tesla slid nearly 11%, while Microsoft and Meta each fell by approximately 4%. Oracle dropped more than 6.5%, signaling that the sell-off is spreading to major tech firms with significant exposure to AI investments.