Wall Street suffered its steepest selloff since April 2025 as technology shares collapsed, with Nvidia losing approximately $374 billion in market value and investors reassessing the future of artificial intelligence investments following Democratic midterm victories.
By yourNEWS Media Newsroom
NEW YORK — U.S. stocks suffered a dramatic selloff Thursday, Nov. 5, as the S&P 500 plunged 4.36%, erasing approximately $2.9 trillion in market value and wiping out the previous day’s post-election gains amid growing investor concerns over artificial intelligence spending, semiconductor demand and potential restrictions on data center development.
The benchmark S&P 500 closed at 7,353.73, recording its steepest one-day percentage decline since the tariff-driven market turmoil of April 2025. The technology-heavy Nasdaq Composite dropped 5.52% to approximately 24,315, while the Dow Jones Industrial Average lost 1,833 points, or 3.44%, finishing at 51,523.06.
According to Reuters, the decline represented the worst session for the major indexes in more than 18 months, with technology and semiconductor companies accounting for much of the damage.
The losses came just one day after investors celebrated Democratic victories in Tuesday’s midterm elections with a powerful rally that sent the Dow more than 1,500 points higher.
That optimism reversed Thursday as Wall Street reassessed the consequences of Democratic control of Congress and state-level election results that could complicate expansion plans for major artificial intelligence companies.
The New York Post reported that companies in the S&P 500 collectively lost approximately $2.9 trillion in market capitalization, while Nasdaq-listed companies shed about $2.5 trillion.
Those figures measure overlapping groups of publicly traded companies and should not be added together to calculate total market losses.
The seven largest technology companies, commonly known as the Magnificent Seven, lost approximately $1.04 trillion in combined market value.
Nvidia experienced the largest individual decline, shedding an estimated $374 billion as its shares fell approximately 9.3%.
Tesla lost roughly $161 billion in market capitalization, while Microsoft declined by approximately $117 billion.
The selloff extended across the semiconductor industry, with the Philadelphia Semiconductor Index plunging approximately 12%, its worst session since the early stages of the COVID-19 pandemic in March 2020.
Broadcom shares fell approximately 10%, while Qualcomm declined around 9% following disappointing guidance for its chip business.
Dell Technologies dropped approximately 15%, and CoreWeave, a company providing computing infrastructure for artificial intelligence applications, lost nearly 10%.
According to The Wall Street Journal, investors reacted to a combination of disappointing technology earnings, concerns about the profitability of massive AI infrastructure investments and expectations that the incoming Democratic congressional majorities could impose additional regulatory requirements.
Qualcomm and Arm Holdings reported results that failed to meet elevated investor expectations for growth linked to artificial intelligence.
The disappointing outlooks contributed to concerns that the rapid expansion of computing infrastructure may not generate profits quickly enough to justify existing stock valuations.
The election results added another source of uncertainty.
Democrats won control of both chambers of Congress Tuesday, while voters in several states supported candidates and ballot measures advocating greater oversight of data center construction.
Local measures restricting or delaying data center development prevailed in dozens of communities, reflecting concerns about electricity consumption, water usage and infrastructure expenses.
Those decisions raised questions about whether technology companies would be able to expand their computing operations as rapidly as previously anticipated.
According to The Guardian, investors increasingly focused on the possibility that state and local restrictions could delay construction of facilities needed to support advanced AI systems.
Data centers have become a major driver of capital spending by companies including Microsoft, Amazon, Alphabet and Meta Platforms.
Semiconductor manufacturers, electrical equipment suppliers and construction companies have also benefited from expectations of continued infrastructure expansion.
Any substantial slowdown could affect projected revenue growth across those industries.
However, the election results do not automatically impose federal restrictions on AI infrastructure. The financial consequences will depend on legislation, local permitting decisions and the responses of technology companies.
Thursday’s selling was not limited to the technology sector.
All 11 major sectors of the S&P 500 finished lower, with approximately 424 of the index’s 500 constituent companies declining.
The widespread losses indicated that investor concerns had spread beyond semiconductor manufacturers and AI infrastructure providers.
The Associated Press reported that the Russell 2000 index of smaller companies also fell 4.4%, closing at 2,729.89.
The Nasdaq’s decline pushed the technology-heavy index into correction territory, defined as a drop of at least 10% from a recent peak.
By Thursday’s close, the Nasdaq was approximately 11.9% below its October high.
Market volatility increased sharply as investors reduced their exposure to riskier assets.
The Cboe Volatility Index, commonly referred to as Wall Street’s fear gauge, surged during the session, reflecting heightened demand for protection against further market declines.
Investors also shifted money toward U.S. Treasury securities and other traditionally defensive assets.
The two-year Treasury yield declined as bond prices rose, indicating increased demand for government debt amid the stock market turmoil.
The selloff coincided with a rebound in oil prices, which complicated expectations that lower energy costs might help reduce inflation.
U.S. crude oil rose approximately 2.7% to $90.52 per barrel after declining sharply Wednesday.
Higher energy prices can increase transportation and production expenses, potentially limiting consumer spending and corporate profitability.
The market decline also renewed attention to Federal Reserve interest rate policy.
Investors have been assessing whether persistent inflation will require the central bank to maintain elevated borrowing costs, even as employment growth slows and businesses express greater caution about hiring.
Thursday’s volatility reduced market expectations for another interest rate increase in December as traders considered the possibility of weaker economic activity.
The Labor Department’s October employment report, scheduled for Friday, Nov. 6, will provide additional information about hiring, unemployment and wage growth.
Strong employment figures could reinforce expectations that interest rates will remain elevated, while weaker data could increase concerns about the broader economy.
The Fortune analysis of Thursday’s losses noted that Wall Street’s strongest post-midterm rally in 44 years lasted only one trading session before approximately $3 trillion in market value disappeared.
The reversal demonstrated how quickly investors’ expectations shifted from optimism about reduced political uncertainty to concerns about the potential effects of new government policies on corporate earnings.
Despite the steep decline, major U.S. indexes remained positive for the year.
The S&P 500 was still approximately 7.4% higher in 2026, while the Dow was up 7.2% and the Nasdaq had gained 4.6%.
Those gains provided some perspective on Thursday’s losses, although the magnitude of the selloff highlighted the sensitivity of technology valuations to changes in growth expectations.
Market analysts cautioned that companies with substantial investments in AI infrastructure could face continued volatility if earnings fail to justify the industry’s rapid expansion.
The broader market also remains exposed to geopolitical developments, including the ongoing war with Iran, energy price fluctuations and the economic policies pursued by the Trump administration.
With the S&P 500 losing 4.36% and nearly $3 trillion in market value erased in a single session, Thursday’s trading marked one of Wall Street’s most severe downturns in more than a year.
The collapse eliminated Wednesday’s post-election gains and left investors confronting renewed uncertainty over the sustainability of the AI investment boom and the direction of the American economy.
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