Wall Street suffered its worst session since April 2025 on Thursday as a sharp technology sell-off wiped out the gains made in the post-midterm election rally.
The S&P 500 fell 4.4 per cent, or 334.89 points, to 7,353.73, while the tech-heavy Nasdaq Composite dropped 5.5 per cent to 24,315. The Dow Jones Industrial Average lost 1,833 points, a fall of 3.4 per cent.
The reversal came just a day after US shares posted their strongest gains in three months, as investors responded positively to the midterm elections. The latest losses more than erased that advance, with all 11 sectors of the S&P 500 ending lower.
Companies linked to artificial intelligence and the construction of data centres were among the biggest fallers. Nvidia declined by more than 9 per cent, AMD plunged 17 per cent and Broadcom fell 10 per cent, while the Philadelphia Semiconductor Index recorded its largest one-day decline since April 2025.
Investors are increasingly concerned that the Democrats’ strong performance in the elections could lead to tighter regulation of data centres or slow the pace of new construction. That has raised doubts about future demand for the chips, power systems and industrial equipment needed to support the AI boom.
Those concerns were compounded by disappointing earnings guidance from Qualcomm, which fell 9.5 per cent. Analysts also pointed to growing questions over whether the huge sums being spent by major technology companies on AI infrastructure will generate sufficient returns.
The Nasdaq has now entered correction territory, having fallen about 12 per cent from its record high reached in October. Market volatility also rose sharply, while investors moved towards government bonds as they sought safer assets.
Attention now turns to the US jobs report due on Friday, which could influence expectations for interest rates and provide a fresh test of investor confidence after the abrupt end to the election rally.
