NEW YORK: US stocks tumbled Thursday, with the Nasdaq Composite falling 5.52% to 24,315.00 points as fears of tougher artificial intelligence regulation weighed on technology shares.
Investors feared Democratic victories in the US midterm elections could slow AI data centre construction. Such projects have helped drive demand for chips and supporting infrastructure.
The S&P 500 dropped 4.36% to 7,353.73 points, while the Dow Jones Industrial Average fell 3.44% to 51,523.06 points. The sell-off erased $3 trillion in market value from S&P 500 companies.
Nasdaq recorded its steepest daily decline in 19 months. It also closed more than 10% below its October 6 record, confirming a technical correction. Semiconductor stocks suffered some of the largest losses.
The Philadelphia SE Semiconductor Index plunged more than 12%, while Nvidia fell more than 9%. Qualcomm fell 9.5% after its fourth-quarter smartphone chip sales missed Wall Street expectations.
Meanwhile, data centre operators IREN and Applied Digital each lost more than 14%. CoreWeave declined almost 10%. Other technology shares weakened. Meta Platforms fell 4%, while Amazon and Alphabet each shed 2.2%.
Melissa Brown, global head of investment decision research at SimCorp, linked the selling to concerns about slower AI infrastructure development.
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She argued that construction delays could unsettle investors because rapid expansion has supported expectations for AI growth.
Argent Capital Management portfolio manager Jed Ellerbroek considered the semiconductor losses excessive. He said, “The magnitude of the moves is outsized”.
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Trading volumes climbed sharply. US exchanges handled 26.9 billion shares, up from a 20-session average of 17.7 billion. Despite Thursday’s losses, the S&P 500 remained 7.4% higher this year, while Nasdaq retained a 4.6% gain.
Federal Reserve officials Beth Hammack and Thomas Barkin discussed the possibility of future interest rate increases on Thursday. Investors will receive the US October nonfarm payrolls report on Friday.
With additional input from Reuters
