Traders work on the floor of the New York Stock Exchange (NYSE) in New York, US, on Wednesday, Nov. 4, 2026.
Michael Nagle | Bloomberg | Getty Images
Stocks plummeted on Thursday, erasing the sharp gains from the rally seen in the wake of the U.S. midterm elections, as investors accelerated their move away from technology stocks on fears of a data-center buildout slowdown.
The Nasdaq Composite declined 5.2% and dipped into correction territory, trading more than 10% below a record set last month. The S&P 500 was down 3.9%, heading for its worst day since April 2025. The Dow Jones Industrial Average shed 1,605 points, or 3%. The Dow erased all of its advance from Wednesday's massive postelection rally. The small-cap Russell 2000 index decreased 4.6% and also entered a correction.
Nasdaq Composite, 5-day
Stocks related to the artificial intelligence trade, particularly those linked to the chips industry and data centers, slid for a second day. Investors fear that a Democratic sweep of both chambers of Congress as well as victories in key gubernatorial races could decelerate the data center buildout.
For instance, Sen. Bernie Sanders of Vermont — who caucuses with Democrats — has called for a national data center moratorium. In a post on X Wednesday evening, Sanders wrote that "Americans don't want Big Tech oligarchs wrecking the environment, gutting jobs and threatening humanity's future."
Chipmakers Broadcom and Nvidia each fell 9% Thursday, while software stock Oracle moved lower by 8%. Another chip stock, Qualcomm, reported earnings that beat estimates, but the stock dropped 11% on a weaker-than-expected earnings outlook. The iShares Semiconductor ETF (SOXX) was down 11%, which would be its worst day since the Covid-19 breakout of March 2020.
Shares of neocloud companies also retreated, with CoreWeave losing 13%, Nebius sliding 16% and Iren shedding 17%, amid those worries about a backlash to the industry in light of the election results in various states.
Investors are "stepping away until they get a better sense of the implications of the midterms around the AI capex cycle in particular, which is the biggest economic tailwind we've had going for us for the last, call it, three years," said Tim Holland, chief investment officer at Orion. "It's about tone and tenor from the party that did really well, incredibly well, at the federal level and at the state level."
Thursday's selling pressure was so intense that it spread to other parts of the market. Shares of industrial giant Caterpillar declined 5%, while financial stock JPMorgan fell 4%, as did aerospace name Boeing. Retailer Nike pulled back 3%.
"Unlike yesterday, you're just seeing that the sell-off in tech, the size of it, is now feeding itself into the broader market," said Keith Lerner, chief investment officer at Truist Wealth. "The rubber band is becoming increasingly stretched."
On Wednesday, the Dow jumped more than 1,500 points to notch its best day since April 2025 after a decisive midterm win for Democrats. The S&P 500 and Nasdaq Composite also popped more than 1% each. Areas related to AI were under pressure, however, while economically-sensitive stocks rose.