Nasdaq Falls 5.5 Percent at the Close and Confirms a Correction as AI Selloff Deepens

Updated 21:14 UTC: Nasdaq closes down 5.5 percent and confirms a correction

Wall Street closed sharply lower on Thursday, November 5, ending the intraday slide this article tracked through the session. According to preliminary data from FactSet reported by MarketWatch, the Dow Jones Industrial Average dropped 3.4 percent, the S and P 500 slumped 4.4 percent and the Nasdaq Composite tumbled 5.5 percent at the close. The selloff was broad: all 11 sectors of the S and P 500 closed in the red, and information technology was the hardest hit.

The closing fall confirms a correction for the Nasdaq Composite, a decline of more than 10 percent from its record closing high of 27,599.89 reached on October 6. MarketWatch reported that investors questioned the artificial intelligence trade and feared the Democratic sweep in the midterm elections may slow the pace of AI investment. Investopedia reported late in the session that the Dow had dropped about 1,600 points, wiping out the gains of Wednesday's post-election rally, with chip stocks again leading the fall. These closing figures are preliminary and replace the intraday readings below.

New latest update: Nasdaq down nearly 5 percent at 11 a.m. ET

The fall deepened again by late morning on Thursday, November 5. At 11:00 a.m. ET the S and P 500 had lost 246.37 points, or 3.20 percent, at 7,440.29, the Nasdaq Composite had lost 1,273.18 points, or 4.95 percent, at 24,463.34, and the Dow Jones Industrial Average had fallen 1,146.83 points, or 2.15 percent, at 52,209.29, Reuters reported. These are intraday figures with the market still open, not a final close.

The Nasdaq Composite looked set to confirm a correction, a fall of 10 percent from its record high close on October 6, and the Nasdaq and the S and P 500 were set for their biggest one-day drop since the April 2025 Liberation Day selloff, Reuters reported. The Nasdaq 100 fell around 5.4 percent and was set to erase over 2.2 trillion dollars in market value if the losses held. The narrower Nasdaq 100 had already confirmed a correction on Monday.

Chip stocks stayed at the center of the fall. Nvidia dropped 6.4 percent and the broader Philadelphia SE Semiconductor index plunged nearly 11 percent. Qualcomm slid 13.5 percent in the 11:00 a.m. ET read after the chipmaker fell short of Wall Street estimates for fourth quarter smartphone chip sales. An earlier Reuters read at 9:57 a.m. ET had put Qualcomm down 9 percent on the same sales miss. Meta Platforms slid 5.7 percent, Amazon fell 4.3 percent, Alphabet fell 3 percent, and Tesla and SpaceX tumbled more than 10 percent each.

Names tied to the AI data center buildout fell further after the Democrats won in some key data center states, where public opposition to the fast expansion of the industry has been growing, Reuters reported via Kitco. Texas Governor-elect Gina Hinojosa campaigned against rapid data centre expansion, Reuters reporting carried by Capital Information noted. "Election results are having an impact on companies with heavy data center exposure," William Blair analysts Tim Mulrooney and Jed Dorsheimer wrote in a research note reported by Barron's. The note said 10 states now have governors who support moratoriums on data centers and that those states hold 40 percent of planned data center capacity in gigawatts. "We expect near-term volatility in AI infrastructure companies over the next several weeks, given the higher win rate of pro-moratorium governors relative to prediction market expectations," the analysts wrote.

A later snapshot reported by Barron's put the Nasdaq Composite down 4.5 percent, the S and P 500 down 3.4 percent, the Dow down 2.6 percent and the PHLX Semiconductor index down 9.7 percent, with data center exposed names Vertiv, Comfort Systems, Sandisk and Flex among the worst S and P 500 performers since the close on Tuesday. The Associated Press headlined the move as the S and P 500 tumbling 3 percent as AI chip stocks dragged Wall Street toward its worst day since the 2025 tariff announcements. Closing figures will replace these intraday reads when the market closes.

Latest update: Nasdaq on track to confirm a correction

The fall deepened again later on Thursday, November 5. These are intraday figures, not a final close. The Nasdaq Composite fell nearly 4 percent to 24,712.60, more than 10 percent below its record closing high of 27,599.89 reached on October 6, putting the index on track to confirm a correction, Reuters reported. A fall of 10 percent from the most recent record closing high is widely considered a correction, and this would be the second correction for the Nasdaq this year.

In later live trading updates the Nasdaq was down 5 percent recently, while the S and P 500 dropped 3.4 percent and the Dow Jones Industrial Average dropped 2.2 percent, according to Investopedia live coverage.

Thursday's slide erased the previous session's gains after Democrats swept both houses of Congress, as investors weighed the prospect of greater scrutiny of further AI infrastructure buildout, Reuters reported. Sentiment toward AI linked stocks has deteriorated in recent weeks. The Nasdaq shed more than 2.5 trillion dollars in market value in October, while several big tech companies tap debt markets to finance planned investments in data centers, chips and other AI infrastructure. Earnings from Alphabet and Meta last month failed to reassure investors about the returns on AI spending.

"The market's moving from the promise of AI to the price of AI," said Ted Parkhill, founder and chief executive of Incline Investment Management, according to Reuters reporting carried by WIXX.

Chip stocks fell further. Qualcomm shares were down 14 percent in early trading despite a strong quarterly earnings report, as the chip designer issued a weak outlook owing to an ongoing shortage of memory components for smartphones. Nvidia was down nearly 8 percent, Advanced Micro Devices plunged 15 percent, Intel and Broadcom each dropped more than 8 percent, and the iShares Semiconductor ETF (SOXX) slid 11 percent. The Philadelphia SE Semiconductor index dropped 8 percent, touching its lowest in more than six months, dragged down by losses in Nvidia and Broadcom.

Memory makers fell hardest. SanDisk, Western Digital and Seagate were each down more than 16 percent. The Roundhill Memory ETF (DRAM) was down 12 percent, and Micron and SK Hynix each plunged more than 12 percent. Tesla and SpaceX shares were each down 10 percent. Neocloud stocks fell, with CoreWeave down 11 percent and Nebius down 15 percent, and data center operators Applied Digital, Cipher Digital and IREN each tumbled more than 15 percent. UBS analysts estimated that around 30 percent of expected United States data center capacity additions in 2028 could be at risk from potential construction pauses.

Qualcomm also fell short of Wall Street estimates for fourth quarter smartphone chip sales on sluggish demand and declining Apple related revenue. Its handset revenue fell 26 percent to 5.14 billion dollars, and at least eight brokerages cut their price targets, according to LSEG data reported by Reuters.

Updated: Nasdaq falls about 3 percent in morning trade as the chip rout deepens

The selloff deepened after the open on Thursday, November 5. These are intraday morning figures, not a final close. The Nasdaq Composite fell about 3.1 percent in morning trading in New York, the S and P 500 slid about 1.7 percent and the Dow Jones Industrial Average dropped 0.7 percent, according to Investopedia live coverage. A timestamped read at 9:50 a.m. Eastern put the Nasdaq Composite down 672.25 points, or 2.6 percent, at 25,064.26, and the S and P 500 down 1.4 percent at 7,580.59, according to JBizNews. The Nasdaq 100 was down about 3.5 percent at one point.

At the opening bell the Nasdaq Composite had dropped 198.95 points, or 0.77 percent, to 25,537.57, the S and P 500 fell 12.86 points, or 0.17 percent, to 7,675.76, and the Dow rose 330.63 points, or 0.62 percent, to 53,686.75, before the Dow also turned lower, Reuters reported via SRN News.

Chip stocks led the fall. The PHLX Semiconductor Index dropped more than 5 percent in early trading and the iShares Semiconductor ETF (SOXX) slid 7 percent. Qualcomm fell 10 percent despite a strong quarterly earnings report, after the chip designer issued a weak outlook tied to an ongoing shortage of memory components for smartphones. Nvidia fell 5 percent, Advanced Micro Devices fell 12 percent, Intel fell 8 percent and Broadcom fell 5 percent in early trading, Investopedia reported. A separate timestamped read at 9:42 a.m. Eastern put AMD down 10.8 percent at 436.05 dollars, Micron Technology down 7.9 percent at 732.42 dollars, Intel down 6.3 percent at 54.59 dollars and Nvidia down 4.4 percent at 191.33 dollars, according to JBizNews.

Memory stocks were among the biggest decliners. The Roundhill Memory ETF (DRAM) fell 8 percent, and SanDisk and Seagate each fell more than 12 percent. Tesla fell about 9 to 10 percent and SpaceX fell about 7 percent. AI infrastructure names also fell, with CoreWeave down 9 percent, Nebius down 13 percent and Iren down 11 percent, as investors weighed tighter regulation of the AI data center buildout under a Democratic Congress, according to reporting carried by Le Private Banker citing CNBC, Yahoo Finance and Bloomberg.

In other markets, WTI crude futures rose 2.2 percent to 90.10 dollars a barrel after plunging 8 percent on Wednesday. Gold futures rose 0.7 percent to 4,100 dollars an ounce. Bitcoin traded at 78,400 dollars, down from a high above 81,000 dollars on Wednesday, and the 10 year Treasury yield ticked lower to 4.87 percent. The morning fall handed back a large part of Wednesday gains, when the Dow jumped nearly 1,600 points after Democrats took control of Congress in the midterm elections.

United States stock futures split early on Thursday, November 5, as the market paused after the biggest rally day of the year and the selloff in chip stocks that hit Asia overnight reached the premarket tape.

As of about 4:03 a.m. ET, S and P 500 futures were down 0.12 percent, Nasdaq 100 futures were down 0.87 percent, Dow futures were up 0.45 percent and Russell 2000 futures were up 0.29 percent, according to delayed futures data tracked by Regards of Wall Street. Stocktwits put the same split at 3:45 a.m. ET, with S and P 500 futures down 0.11 percent, Nasdaq 100 futures down about 1 percent and Dow futures up 0.5 percent. A morning brief from Samuel and Co. Trading gave levels: S and P futures at 7,706.50, down 0.18 percent, Nasdaq 100 futures at 28,307.25, down 0.91 percent, and Dow futures up 0.31 percent.

The hangover stock list

Premarket trading showed where the pressure sat. MarsBit data carried by KuCoin listed broad falls in storage, cloud and optical names: Micron down 2.71 percent, SanDisk down 2.92 percent, Western Digital down 3.22 percent, Seagate down 3.51 percent and SK Hynix down 3.77 percent. CoreWeave fell 1.91 percent and Nebius fell 3.50 percent, while Coherent rose 3.58 percent against the trend. Broadcom fell 1.98 percent and Marvell fell 3.00 percent. Biotech and big pharma moved the other way, with Eli Lilly up 1.27 percent, Johnson and Johnson up 1.26 percent and AbbVie up 1.22 percent.

Stocktwits reported AppLovin among the biggest premarket gainers, up about 18 percent after record third quarter results on Wednesday, on top of a 10 percent gain in the regular session. Tesla fell about 2.2 percent in early premarket trade as questions resurfaced over a possible Tesla and SpaceX merger and the regulatory hurdles around Elon Musk. Nvidia was down about 1 percent and Apple slipped 0.15 percent after crossing a 5 trillion dollar valuation on Wednesday.

What Wednesday did

The pause followed an emphatic session. The Dow Jones Industrial Average rose 3.03 percent to 53,356.12 on Wednesday, a gain of more than 1,500 points. The S and P 500 gained 1.58 percent to 7,688.62 and the Nasdaq Composite advanced 1.44 percent to 25,736.51. The VIX volatility index plunged 20.26 percent to 16.61. Oil fell hard, gold rose to about 4,150.70 dollars in the Samuel and Co. brief, and the dollar softened to 101.25 on its index.

The rally ran on the midterm result. Democrats won both chambers of Congress, oil dropped about 8 to 9 percent on hopes of an end to the Iran war, and investors bought the clarity.

The day ahead

Thursday brings weekly jobless claims and a full earnings slate: DraftKings, Novavax, GoPro, Airbnb and Akamai all report. Friday brings the bigger test, the October nonfarm payrolls report from the Bureau of Labor Statistics at 13:30 GMT, the first full jobs read since the election.

The open will show whether Wednesday was a one day release or the start of a run. The Dow futures bid says value and industrial names still have buyers. The Nasdaq futures slide says the chip trade, hit in Seoul and Taipei overnight, is not done falling yet.