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The Dow, S&P 500 and Nasdaq fell sharply Thursday, erasing gains from the previous session’s post-election rally. Chip stocks led the decline, while investors weighed questions about AI infrastructure, political changes and the outlook for oil and the economy.
US stocks plunged Thursday as investors sold chip and other technology shares, wiping out gains from the previous day’s post-election rally. The Dow Jones Industrial Average fell 2.2%, the S&P 500 dropped 3.3% and the Nasdaq Composite sank 5% in the source report’s latest figures, as markets reassessed the implications of Democrats’ election wins for technology investment and the broader economy.
The Philadelphia Semiconductor Index fell 11%, with Nvidia, Micron and other chipmakers among the hardest-hit stocks. The Nasdaq’s decline put it on course to close in correction territory, although the report did not confirm a closing level or say that the index had officially entered a correction. The figures describe trading during the session, not final closing results.
The reversal followed a strong Wednesday session, when investors had responded to Democrats winning control of both chambers of Congress. Yahoo Finance reported that the Dow rose 3% that day, its strongest post-midterm session since 1982. On Thursday, the Nasdaq erased its post-election gains within minutes, according to the live report, before falling further.
Technology losses extended beyond chipmakers. Yahoo Finance reported that Tesla and SpaceX shares each fell more than 9%, as investors considered possible regulatory challenges to US data-center construction and a proposed merger between the companies. Dan Ives, a partner and managing director at Yorkville, wrote that a merger could face a tougher regulatory path in 2027 following the election results.
Chip Losses Reverse Election Rally
The sharp reversal shows that the market response to election results was not settled after Wednesday’s rally. Investors initially welcomed the end of election uncertainty, but Thursday’s selling reflected concerns about how a new balance of power in Washington could affect the technology sector, particularly the data centers that support AI development.
The losses were broad enough to reach beyond individual companies. The report said the S&P 500 had shed more than $2 trillion in market value by midmorning. The CBOE Volatility Index, a measure of expected market volatility, rose more than 65% to as high as 27.45, according to the report. That is a reported intraday move, not a measure of the market’s eventual close.
For investors and workers, the session also brought together several economic signals that do not point in one clear direction. Oil prices rose amid uncertainty over the war in the Middle East, while a report on planned layoffs showed October plans at their lowest level since 2023. The markets were preparing for a key US employment report due Friday.
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A One-Day Post-Midterm Rally
Wednesday’s rise came after Democrats won control of the House and Senate in the midterm elections. Yahoo Finance said falling oil prices and lower Treasury yields also supported that session’s gains. By Thursday, investors were weighing the possible effects of the political shift on regulation, corporate plans and investment in AI infrastructure.
The comparison with earlier election sessions comes from the source report, which said Thursday’s potential declines would rank among the weakest second sessions after midterms in historical market data. Such historical comparisons describe past trading; they do not establish why prices moved or predict what will happen next.
Oil was another focus. Brent crude traded around $97 a barrel, while US benchmark West Texas Intermediate was near $90 a barrel, according to the report. Prices rose amid uncertainty about whether President Donald Trump would pursue a deal with Iran to end the Middle East war. Vice President JD Vance had written on X that the war was a reason Republicans lost the midterm elections and suggested the party should seek a resolution.
Closing Levels and Policy Effects
The source report gives intraday losses, and the final closing levels for the Dow, S&P 500 and Nasdaq were not provided. It is also not clear from the report whether the Nasdaq ultimately closed in correction territory. The scale and duration of the sell-off therefore remain unsettled in the available information.
Markets were reacting to perceived risks, not confirmed policy changes. The report did not identify specific new rules for AI data centers, confirm that Tesla and SpaceX will merge, or establish what a Democratic-led Congress will do on technology regulation. The future of oil prices also depends on developments in the Middle East that were unresolved at the time of publication.
Jobs Data and Company Results
Investors were looking ahead to Friday’s US employment report for more information about hiring and the economy. A report from Challenger, Gray & Christmas said planned layoffs in October fell to their lowest level since 2023, as companies focused on retaining existing employees. That measure of announced layoff plans is not a complete account of employment conditions, and the government jobs report may offer a different set of data.
Company results were also on the calendar. Duke Energy, Airbnb and Lumentum were among the firms scheduled to report earnings, according to Yahoo Finance. Further trading will show whether Thursday’s losses persist or whether investors reassess the election, technology and economic outlook.
Key Questions
Why did US stocks fall Thursday?
Yahoo Finance reported that AI and chip shares sold off as investors reconsidered the implications of Democrats winning control of Congress, including possible effects on technology investment and data-center construction. The report does not establish one cause for the entire market decline.
How much did the major indexes fall?
In the report’s latest intraday figures, the Dow fell 2.2%, the S&P 500 fell 3.3% and the Nasdaq dropped 5%. These were not confirmed closing figures.
Did the Nasdaq officially enter a correction?
The report said the Nasdaq was on track to close in correction territory. It did not provide a final closing level confirming that it did so.
What happened to semiconductor stocks?
The Philadelphia Semiconductor Index fell 11% in the report’s intraday figures, with Nvidia, Micron and other chipmakers among the stocks hit hardest.
What market data were investors watching next?
The next major scheduled economic release cited in the report was Friday’s US employment report. Investors were also watching company earnings, including results from Duke Energy, Airbnb and Lumentum.
Source: finance.yahoo.com
