Nasdaq sinks 5.5%, enters correction as AI trade unravels
What's new: The Nasdaq 100 erased about $2.5 trillion in value, while the PHLX Semiconductor index fell 12% and Nvidia dropped 9%.
The Nasdaq Composite fell 5.52% on Thursday to 24,315, its biggest one-day drop in 19 months, pushing the tech-heavy index more than 10% below its Oct. 6 record close and into correction territory. Investors sold chipmakers, data-center operators and other AI-linked stocks after Democrats won control of the US Congress, fueling fears that tougher scrutiny could slow the AI infrastructure buildout that has driven markets this year. The S&P 500 lost 4.36% and the Dow fell 3.44%. Nvidia dropped 9%, Advanced Micro Devices slid 17%, and the Nasdaq 100 wiped out about $2.5 trillion in market value. The sell-off spread into Europe on Friday, with the Stoxx 600 down 1% as investors braced for more volatility around AI policy and valuations.