Wall Street falls as chip and data-center stocks pull Nasdaq toward correction
U.S. equities dropped on Thursday, led by steep declines in semiconductor and AI-related shares, pushing the Nasdaq toward correction after a rally sparked by the Democrats' midterm win.
U.S. stock indexes fell sharply on Thursday, with the Nasdaq Composite down about 3 % and on track for a correction after steep losses in chip and data-center stocks. Qualcomm dropped 9 % after reporting fourth-quarter smartphone chip sales that missed Wall Street estimates, while the broader semiconductor index fell 7.1 % amid losses in Nvidia, AMD, Intel and Marvell Technology.
Data-center operators IREN, Hut 8 and Applied Digital fell between 6 % and 11 %, and AI-focused firms CoreWeave and Nebius Group lost 9.3 % and 13.4 % respectively. Utilities and equipment suppliers tied to the data-center boom, such as Vernova and Constellation Energy, also traded lower, and Dell slipped 10.5 %.
At 9:57 a.m. ET, the Dow Jones Industrial Average was down 0.66 % at 53,004.25, the S&P 500 fell 1.66 % to 7,560.88, and the Nasdaq Composite declined 3.09 % to 24,941.44. Five of the S&P 500’s 11 sectors posted losses, led by technology and consumer discretionary, while energy posted gains.
Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: "There is now a chance that the two years of extra push from the Trump government for artificial intelligence build-out will somehow be scaled back because there has been a lot about the AI trade that has been ignored by the current administration. We suspect there is going to be some scrutiny on this aggressive AI build-out."
Large-cap tech stocks also retreated, with Meta Platforms down 3.4 %, Amazon and Alphabet modestly lower, and Tesla falling 9.5 % after the company’s CEO spent nearly half a billion dollars supporting Republican candidates in Texas. Snap lost 12 % after missing revenue estimates, while AppLovin rose 32 % on a profit beat.
Analysts noted that a divided Congress could limit major legislative moves and complicate fiscal policy, while a drop in oil prices supported market sentiment. Cleveland Federal Reserve President Beth Hammack reiterated support for a gradual rate-hike path to curb inflation, and traders awaited the October non-farm payrolls report, expecting a possible Fed rate increase next month.