Markets
Chip Rout Erases Post-Election Rally as Nasdaq Falls Nearly 4% and Semiconductor Index Drops About 10%
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Nvidia, AMD and memory makers lead a sharp reversal in US stocks as investors weigh what a Democratic Congress could mean for AI data-center spending.
By Emma Cruz ·
Wall Street gave back all of Wednesday's post-election rally and more on Thursday as a violent selloff in semiconductor and AI-infrastructure stocks dragged the Nasdaq Composite sharply lower. By late morning the technology-heavy index was down roughly 3.8%, according to Yahoo Finance data, with the S&P 500 and Dow also deep in the red [1].
At 11:36 a.m. ET the Nasdaq stood at 24,758.89, down 977.63 points or 3.80%. Quotes on the same Yahoo Finance page, which were not time-stamped, showed the S&P 500 down 2.75% at 7,476.96, the Dow Jones Industrial Average down 2.01% at 52,284.04 and the Russell 2000 down 2.95% [1]. Earlier, at about 10:10 a.m. ET, The Associated Press reported the S&P 500 down about 2%, the Dow down 502 points and the Nasdaq down 3.6%, so losses widened as the morning went on [2].
Chip stocks bore the brunt. The AP said Nvidia fell 6.3% in mid-morning trading, a day after a 3.2% drop, making it the heaviest weight on the S&P 500, while Advanced Micro Devices lost 13.1% and CoreWeave fell 10% [2]. Yahoo Finance reported that the PHLX Semiconductor Index was down about 10% and sat more than a third below its June record. Memory and storage names such as Micron, SanDisk, Western Digital and Seagate posted double-digit declines, and the S&P 500 had shed more than $2 trillion in market value, with chipmakers accounting for well over $1 trillion of that [1].
The trigger is partly political. Democrats won control of both chambers of Congress in Tuesday's midterm elections, and analysts cited by Yahoo Finance said investors are now weighing what that could mean for AI infrastructure and the data centers that drive it [1]. The AP added that Democratic wins raised the possibility that governments could pause new data-center construction, and that AI chip stocks had already been volatile for months over concern that buildouts could slow because borrowing costs are high [2]. Yahoo Finance noted that investors are demanding higher yields from heavily indebted companies financing data centers, and that the Nasdaq 100 closed in correction territory on Monday, more than 10% below its October 6 record [1].
The scale of the move carries historical weight. Yahoo Finance said the Dow was on track for its worst second session after a midterm election in data going back to 1896, and that the S&P 500's previous worst second day after a midterm was in 2002, when it fell about 2.3% [1]. On Wednesday the Dow had gained about 3%, its best post-midterm day since 1982 [1].
Not everything fell. AppLovin jumped 31.8% after beating expectations and approving a buyback of up to $3.6 billion, and Tapestry rose 8.3% after a stronger profit and raised forecasts, the AP reported [2]. Overseas, South Korea's Kospi tumbled 5.3% and Japan's Nikkei 225 fell 1.8%, while London's FTSE 100 rose 0.4% [2].
Outside equities, the picture was mixed. The AP said Brent crude rose 2.5% to $96.95 a barrel, recovering part of a nearly 9% drop the previous day, as uncertainty over the Iran war and energy supply persisted. The 10-year Treasury yield eased to 4.86% from 4.90%, compared with 4.95% on election night and above 5.30% last month [2]. The AP also noted that fewer US workers filed jobless claims last week and that third-quarter productivity improved more than economists expected [2].
Next up for traders is Friday's US jobs report, the next major labor-market release, after Challenger, Gray & Christmas reported 43,994 announced job cuts for October, the lowest level since 2023 according to Yahoo Finance's live coverage [3]. Investors will also be watching whether chip stocks stabilize or whether the selloff spreads further into AI-linked names, and how bond yields behave if risk appetite stays weak.
Sources:
[1] Yahoo Finance, "Chip stocks get slaughtered as Wall Street heads for its worst post-midterm day since 1896", November 5, 2026. https://finance.yahoo.com/markets/article/chip-stocks-get-slaughtered-as-wall-street-heads-for-its-worst-post-midterm-day-since-1896-163413900.html
[2] The Associated Press (via Dayton Daily News), "A wipeout for AI stocks sends Wall Street reeling, and the S&P 500 tumbles more than 3%", November 5, 2026. https://www.daytondailynews.com/nation-world/more-drops-for-nvidia-and-other-ai-chip-stocks-erase-wall-streets-rally-from-the/article_3e7a30c6-65f2-502d-8196-1c4fb4317c85.html
[3] Yahoo Finance, "Stock market today: Dow rises, S&P 500 and Nasdaq slip as post-election relief rally fades, oil rises", November 5, 2026. https://finance.yahoo.com/markets/live/stock-market-today-thursday-november-5-dow-sp-500-nasdaq-oil-rises-chip-stocks-141439950.html
This article was produced with AI assistance. It is for informational purposes only and is not financial advice. StockVolt and its authors may hold positions in securities mentioned.