Markets
Nasdaq closes in correction as S&P 500 falls 4.4% and chip index plunges 12%
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Thursday's AI-driven selloff erased the post-election rally, lifted the VIX to 28 and leaves Friday's jobs report as the next test.
By Emma Cruz ·
US stocks ended Thursday sharply lower as a selloff in chip and artificial-intelligence shares spread across the market, wiping out the rally that followed Wednesday's Democratic win in Congress. At the 4 p.m. ET close, the S&P 500 finished at 7,353.73, down 334.89 points, or 4.36%, according to Yahoo Finance data [1]. A closing-index table published by radio station KRMG put the decline at 4.4% [2].
The Nasdaq Composite fell 1,421.52 points, or 5.52%, to 24,315.00, and Yahoo Finance said that left the index in correction territory, meaning at least 10% below a recent high [1]. The Dow Jones Industrial Average dropped 1,833.06 points, or 3.44%, to 51,523.06, and the small-cap Russell 2000 lost 127.06 points, or 4.45%, to 2,729.89 [1][2].
The sharpest damage was in semiconductors. The Philadelphia Semiconductor Index closed at 9,011.14, down 1,257.52 points, or 12.25%, by Yahoo Finance's calculation [1]. Nvidia, Micron and AMD all sold off heavily, and AMD was down about 15% at one point during the session [1].
Yahoo Finance attributed the move to a mix of profit-taking and political worry. Institutional investors were reported to be selling the year's best performers to lock in gains, while retail investors sold a net $358 million of individual stocks, which the report described as their heaviest selling day since 2020 [1]. Investors also fretted that a Democratic Congress could bring tougher regulation of AI data-center construction, a market interpretation rather than any enacted change [1].
Volatility jumped. The Cboe Volatility Index rose about 70% to 28.18, its largest one-day gain in more than two years, Yahoo Finance reported [1]. The Nasdaq also slipped below its 200-day moving average, and one strategist quoted by Yahoo Finance expects more choppy trading [1].
Outside equities, the 10-year Treasury yield was about 4.84% late in the session, down roughly 1% on the day, Yahoo Finance reported [1]. West Texas Intermediate crude for December delivery settled at $90.96 a barrel, up 3.2%, while Brent traded near $98, as uncertainty lingered over whether the United States and Iran will reach a deal to end the Middle East conflict [1].
Digital assets fell alongside stocks. CoinDesk reported that bitcoin dropped more than 5% as equities closed out their worst day since April 2025, with the AI-trade selloff dragging down crypto-linked shares as well [3].
Not every stock followed the tape lower. Yahoo Finance noted that AppLovin surged after beating third-quarter estimates [1].
For Friday, the main scheduled event is the October employment report, which Yahoo Finance called a key data point [1]. Challenger, Gray & Christmas reported earlier that announced layoff plans in October were the lowest since 2023 [1]. Markets will also look for whether the chip selloff continues or stabilizes, and whether Thursday's jump in the VIX fades. Crypto legislation known as the Clarity Act is considered unlikely to advance before the end of the year, according to a Washington policy analyst cited by Yahoo Finance [1].
Sources:
[1] Yahoo Finance, "Stock market today: Dow plunges 1,800 points, Nasdaq enters correction in AI trade meltdown", 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
[2] KRMG, "How major US stock indexes fared Thursday 11/5/2026", November 5, 2026. https://krmg.com/2026/11/05/how-major-us-stock-indexes-fared-thursday-11-5-2026/
[3] CoinDesk, "Live updates: Bitcoin drops more than 5% as stocks close out worst day since April 2025", November 5, 2026. https://www.coindesk.com/business/2026/11/05/live-updates-bitcoin-steady-around-usd80-000-as-markets-rally-after-democratic-sweep
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.