Markets
The Nasdaq Fell 5.5% and Slipped Into a Correction
The Nasdaq Composite fell 5.52% to 24,315.00 on Thursday, its worst day since April 2025, and closed more than 10% below its October record, as chip stocks led the fall.
One day after the Dow's best session in 19 months, Wall Street gave the whole gain back and more. On Thursday, November 5, the Nasdaq Composite fell 1,421.52 points, or 5.52%, to 24,315.00, the S&P 500 lost 4.36% to 7,353.73 and the Dow Jones Industrial Average dropped 1,833.06 points, or 3.44%, to 51,523.06. For all three it was the worst day since April 2025. The Nasdaq ended more than 10% below its October 6 record close, the usual definition of a correction, and below its 200-day moving average for the first time since April; the Russell 2000 fell 4.45% and entered a correction too.
Nothing was spared. All 11 sectors of the S&P 500 fell, led by information technology with a 6.6% loss, consumer discretionary with 4.1% and industrials with 4%, and at one point decliners outnumbered advancers by 419 to 84, CNBC reported. The Cboe Volatility Index briefly touched 28.09, its highest since March 31. The seven largest technology companies lost close to $900 billion of market value between them, with Nvidia alone down $374 billion as the stock fell 9.26% to $181.60.
The trigger was the same election that had lifted stocks on Wednesday, read differently. Democrats won both chambers of Congress and key governor races in Texas, Ohio and Georgia, and voters sided against new data centres in 40 of the 41 local ballot measures counted by Ballotpedia. Investors who had cheered gridlock on Wednesday spent Thursday asking whether the buildout behind this year's AI rally will slow. "It's about tone and tenor from the party that did really well, incredibly well, at the federal level and at the state level," said Tim Holland, chief investment officer at Orion. Qualcomm's soft outlook the night before and a warning about memory costs made the chip group the epicentre: the iShares Semiconductor ETF fell more than 12%, its worst day since March 2020.
Not every market joined in. Asian indexes were split, with South Korea's Kospi down 5.28% but the Hang Seng up 3.61%, and London's FTSE 100 lost only 0.43% to 10,782.66. The 10-year Treasury yield eased to about 4.84% from 4.89%, and traders cut the odds of a Federal Reserve hike in December to 70.1% from 82.7% the day before, according to the CME FedWatch tool. Brent crude rose about 4% after Wednesday's 8.7% fall, and bitcoin dropped 5.7% to about $75,900.
A correction is a measure of distance, not a forecast. The Nasdaq is still up about 4.6% for the year; it was last below its 200-day average in April and recovered to a record by early October. What has changed is the question investors ask of the AI trade: less about demand for chips, more about whether the data centres can be built, powered and paid for. "The rubber band is becoming increasingly stretched," said Keith Lerner of Truist Wealth. Friday's October jobs report and next week's inflation data now arrive in a market that has lost its cushion.