QUICK TAKE | Why Did the Nasdaq Fall 5.5%? Seven Things to Know About Wall Street’s AI Sell-Off

1. How bad was the sell-off?

The Nasdaq Composite fell 5.52%, the S&P 500 dropped 4.36% and the Dow Jones Industrial Average lost 3.44%, or more than 1,800 points. The S&P 500 and Nasdaq recorded their steepest daily declines since April 2025. The Dow’s slide showed how far the selling had spread beyond tech.

2. Which stocks took the biggest hits?

AMD plunged 17.3% and Nvidia fell 9.3%. The selling reached companies that supply the infrastructure around those chips. GE Vernova, which provides power equipment for data centres, dropped 7.5%. Investors were reassessing spending on the buildings and power systems that keep AI hardware running.

3. What did the US midterms have to do with it?

Democrats won control of Congress, and Gina Hinojosa, who campaigned for a pause on new data centres, won the Texas governor’s race. Investors began weighing whether tighter rules and opposition over power and water use could slow projects. A slower buildout could push back orders for chips and equipment.

4. Was politics the only pressure on chip stocks?

Company results added to it. Qualcomm fell after its quarterly chip sales missed estimates. Borrowing costs also matter for a construction boom that requires large sums upfront. The sell-off brought those concerns together with doubts about how quickly customers will turn AI investment into revenue.

5. Is the Nasdaq in a correction?

Yes. It closed at 24,315, about 11.9% below its October 6 record close. A correction commonly means a fall of at least 10% from a recent peak. The 5.52% figure measures Thursday’s loss alone.

6. How far did the selling travel?

Japan’s Nikkei fell more than 6% in early Friday trade. In India, GIFT Nifty was down about 188 points in early trade, pointing to a weak opening for domestic equities. That reading came ahead of the regular Indian trading session.

7. How much market value disappeared?

Reuters put the loss for S&P 500 companies at about $3 trillion. That is the drop in what the market valued their outstanding shares at after prices fell. It measures how sharply investors marked down those companies in a single session.