Wall Street Slides as AI and Chip Stocks Lead Broad Sell-Off After Election Rally

Wall Street experienced a broad sell-off on Thursday, reversing gains made after the U.S. midterm elections. The Nasdaq Composite fell 5.52 percent, its largest daily decline in 19 months, while the S&P 500 dropped 4.36 percent and the Dow Jones Industrial Average slipped 3.44 percent, each posting their steepest one-day losses since April 2025. The volatility index rose sharply, reflecting heightened investor anxiety.

The downturn was led by a sharp sell-off in semiconductor and artificial-intelligence-related stocks. Advanced Micro Devices tumbled 17.3 percent, Micron Technology fell 17.5 percent, Nvidia lost 9.3 percent and Qualcomm dropped 9.5 percent after its smartphone-chip sales forecast disappointed investors. The weakness spread to firms that build AI infrastructure, as investors reassessed valuations and future spending on data-centre capacity.

The rally that preceded the decline had been driven by optimism over the Democrats' sweeping victory in the midterms, which gave investors hope for clearer economic and political direction. However, several Democratic candidates have voiced opposition to rapid AI data-centre expansion, citing concerns about electricity use, environmental impact and local costs. Market participants are now weighing the possibility of tighter regulations or delays that could curb AI-related capital spending.

Analysts also noted that many investors booked profits after the election-driven rally, reducing exposure to technology shares as the market opened higher. The profit-taking accelerated as AI and chip stocks fell, dragging broader market sentiment lower.

The midterm elections delivered a decisive win for the Democratic Party, which secured control of both chambers of Congress, ending unified Republican control and presenting a significant political challenge for President Donald Trump in his final two years in office.