U.S. stocks fell sharply Thursday as a steep decline in artificial intelligence-related shares unsettled investors. The Dow Jones Industrial Average lost 1,833.06 points, or 3.44%, and the Nasdaq Composite dropped 5.52%.
The Nasdaq ended in correction territory, closing at least 10% below its record high from Oct. 6. The S&P 500 also slid, losing 4.36%.
Technology and semiconductor stocks took some of the biggest hits. Investors were assessing whether Democrats’ midterm election wins could lead to tighter AI rules or slow the expansion of data centers. The sell-off followed a broad rally the day after the election.
Nvidia fell about 9.26%, while the Philadelphia Semiconductor Index sank more than 12%. Data center operators IREN, Applied Digital and Nebius Group each lost over 14%. Meta dropped 3.96%, and Amazon and Google parent Alphabet also declined. GE Vernova and Constellation Energy, both tied to the power needs of the AI boom, were among the companies caught in the downturn.
Tesla shares plunged about 10.77%, while SpaceX fell 9.05%.
eToro market analyst Jakub Rochlitz said investors appeared to be reassessing the election results after the previous day’s gains, when some political uncertainty had eased. He also pointed to rising electricity costs, which helped make data center construction a campaign issue. Some Democrats have called for limits or pauses on new projects.
Rochlitz said investors may now expect AI infrastructure to be built more slowly and at greater expense, changing growth expectations across the supply chain.
Jed Ellerbroek, a portfolio manager at Argent Capital Management, described the decline as a possible capitulation among companies benefiting from data center spending, particularly semiconductor firms. Still, he said, the scale of the market moves seemed excessive.
