Nasdaq Enters Correction as AI Fears Hit Wall Street

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A selloff driven by worries over a slower AI build-out hit the whole U.S. market on Thursday. The Nasdaq Composite fell 5.5% and closed in correction territory.

The index moves

The S&P 500 dropped about 4.4%. The Dow lost roughly 1,833 points, or 3.4%. The small-cap Russell 2000 also finished in correction territory. The moves wiped out Wednesday's big post-election gains and more.

For the Nasdaq, the S&P 500 and the Dow, it was the worst single day since the tariff shock of April 2025. On April 4, 2025, the Nasdaq fell 5.82%, the S&P 500 fell 5.97% and the Dow fell more than 2,200 points, or 5.5%.

The worry was that the midterm outcome might hold back new data center projects.

Tech took the hit

The "Magnificent Seven" lost more than $1 trillion in combined market cap. Nvidia led with a loss of more than $440 billion. It fell more than 9% and is now down 2.6% for the year.

All 11 S&P 500 sectors finished lower. Information technology dropped 7.30%, its worst day since March 16, 2020. The Technology Select Sector SPDR Fund, XLK, fell 8.04%. It traded more than 33 million shares, over three times its 30-day average of 9.2 million.

Industrials fell 4.12%, their worst day since April 4, 2025.

How wide the damage ran

On the New York Stock Exchange, decliners beat advancers 2,344 to 416. On the Nasdaq Composite the count was 4,166 to 855. The CBOE Volatility Index gained 11.57 points, its largest jump since April 4, 2025, and reached its highest level since March 31.

In the S&P 500, 174 stocks, or 34.6%, sit 20% or more below their 52-week highs. They include Intel, Oracle, Micron, Alphabet, Nvidia and Coinbase. In all, 310, or 61.6%, are at least 10% below. In the Nasdaq-100, 59 stocks, or 58.4%, are more than 20% off their highs, among them CoreWeave, Arm Holdings and SpaceX.

Source: CNBC