S&P 500 falls 4.4% and Nasdaq drops 5.5% into correction as AI stocks sell off

NEW YORK (Nov. 5) — U.S. stocks plunged Thursday in their steepest slide since President Donald Trump's April 2025 tariff shock, as investors sold shares tied to artificial intelligence and data centers after Democrats won control of Congress.

The S&P 500 fell 4.36% to 7,353.73, Reuters reported. The Nasdaq Composite dropped 5.52% to 24,315.00, its biggest one-day decline in 19 months, and closed in a technical correction — at least 10% below its Oct. 6 record. The Dow Jones Industrial Average lost 3.44%, or about 1,833 points, to 51,523.06, according to Reuters and CNBC.

Reuters said the sell-off wiped about $3 trillion from the market value of S&P 500 companies. CNBC reported that the so-called Magnificent Seven technology stocks lost more than $1 trillion in combined market value, with Nvidia alone down more than $440 billion as its shares fell more than 9%.

Chipmakers led the decline. The Philadelphia SE Semiconductor Index plunged more than 12%, Reuters reported, its second-biggest drop on record according to a Reuters trading-day wrap. Qualcomm fell about 9.5% after a soft outlook, and NBC News said Arm Holdings slid about 13%. AMD, Micron and other memory and chip names also posted double-digit percentage losses in the session, according to CNBC and NBC News.

Investors tied part of the move to Tuesday's midterm results. Democratic wins, including in states where opposition to new data centers has grown, raised concerns that tighter rules or permitting delays could slow the AI infrastructure buildout that has helped lift stocks this year, Reuters reported. All 11 S&P 500 sectors finished lower, with information technology down about 7.3%, CNBC said.

Oil rose 3% to 4% as investors also watched the war with Iran, according to Reuters. After Thursday's close, Reuters said the S&P 500 was still up about 7.4% for 2026 and the Nasdaq about 4.6%.