AI-related stocks tumble as S&P 500 slides 3.5% amid midterm election fallout
Wall Street saw a broad sell-off on Thursday, led by AI chip makers, after the S&P 500 fell 3.5% and the Dow slipped 2.7%, while U.S. midterm results raised concerns over future data-center construction.
The S&P 500 dropped 3.5% on Thursday, extending a decline that erased the gains made the previous day, its best performance in three months. The Dow Jones Industrial Average was down 1,433 points, or 2.7%, and the Nasdaq composite fell 4.7% as of midday Eastern time. The slide marks the index’s steepest fall since President Donald Trump’s “Liberation Day” tariff announcement in April 2025.
Shares of companies tied to AI data-center build-outs led the losses. Nvidia fell 7.5%, while Advanced Micro Devices slumped 14.6% and cloud-AI provider CoreWeave dropped 12.1%. GE Vernova, a supplier of power solutions for data centers, sank 6.1%. The broad decline affected every sector of the S&P 500.
The downturn was amplified by Tuesday’s U.S. midterm elections, which gave Democrats control of Congress and raised the prospect of regulatory pauses on new data-center projects. Such measures could curb demand for AI chips, electricity and related services that have been driving recent economic growth.
A few stocks posted gains. AppLovin jumped 28% after reporting revenue and profit that beat analysts’ expectations and announcing a share-buyback program worth up to $3.6 billion. Tapestry, the parent of Coach and Kate Spade, rose 6.6% on stronger-than-expected earnings and an upgraded revenue outlook.
In other markets, Brent crude recovered 2.6% to $97.11 a barrel after a sharp decline, while the 10-year U.S. Treasury yield fell to 4.83% from 4.90% the previous day, indicating continued demand for safe-haven bonds. Labor data showed fewer unemployment claims and higher summer productivity, suggesting the economy can grow without adding to inflation pressures.
European and Asian indexes were mixed. Japan’s Nikkei 225 slipped 1.8% on tech and AI-related losses, and South Korea’s Kospi fell 5.3%. London’s FTSE 100 dipped 0.4% after the Bank of England raised its main interest rate for the first time in three years. Bank of England Governor Andrew Bailey said, "We’ve seen encouraging news in the past 48 hours. The best thing that can happen is to resolve the conflict in the Middle East; there’s no question about it."