Wall Street Crashes on AI Fears: Dow Sheds 1,833 Points, Nasdaq Falls Into Correction
A one-day post-election rally vanished on Thursday as chip and data-centre stocks were dumped. The Nasdaq lost 5.5%, the S&P 500 4.4% and Nvidia more than 9%.
US stocks suffered their heaviest one-day fall in more than a year and a half on Thursday, 5 November, as investors rushed out of companies tied to the artificial-intelligence boom. The slide wiped out the rally that had followed Tuesday’s midterm elections only a day earlier.
The numbers
- Dow Jones Industrial Average: down 1,833.06 points (3.44%) to 51,523.06
- S&P 500: down 334.89 points (4.36%) to 7,353.73
- Nasdaq Composite: down 1,421.52 points (5.52%) to about 24,315
For all three indexes it was the worst session since April 2025, when sweeping US tariffs rattled markets. The Nasdaq ended more than 10% below its 6 October record, which puts it officially in correction territory.
Chipmakers hit hardest
Nvidia fell about 9.3% and was the single biggest drag on the S&P 500, because a move in a company of its size outweighs almost any other stock. The Philadelphia Semiconductor Index dropped more than 12%. Advanced Micro Devices, cloud-chip renter CoreWeave and power-equipment maker GE Vernova all took heavy losses, and data-centre operators such as IREN, Applied Digital and Nebius fell more than 14% each. Tesla lost close to 11%.
Why the market turned
Analysts linked the sell-off to the Democrats’ sweeping midterm wins. Rising electricity bills had turned power-hungry data centres into a campaign issue, and some Democrats have called for limits or pauses on new projects. Traders read that as a sign the AI build-out could become slower and costlier, which would mean fewer chip orders across the supply chain. Worries about high borrowing costs had already been weighing on the sector for months.
Not every stock fell: roughly two in five S&P 500 companies were higher in the morning session, led by AppLovin and Coach-owner Tapestry after strong results. Investors also moved into US government bonds, pushing the 10-year Treasury yield down to about 4.84%.
What it means for India
Asian markets with large tech weightings, such as South Korea and Japan, were expected to feel the pressure on Friday. Indian benchmarks, however, shrugged off the overnight rout on Dhanteras morning and traded higher by midday, helped by IT and private bank shares.
Featured image: New York Stock Exchange, August 2017 — Arild Vågen, CC BY-SA 4.0, via Wikimedia Commons
Sources
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