Stocks crater as investors recoil from tech companies
Tech-heavy Nasdaq plunges nearly 1,300 points as Wall Street weighs the impact of Democratic wins on the AI sector.
Key points
- The Nasdaq Composite fell 1,285 points, or 5%, in early-afternoon trading on Thursday.
- Nvidia dropped 7.5% and was the heaviest weight on the S&P 500.
- Investors worry Democratic midterm wins could slow construction of AI data centers.
U.S. stocks fell sharply on Thursday as investors worried that a shift in congressional political control after this week's midterm elections could slow construction of the data centers that power artificial intelligence services. Technology companies tied to AI were hit hardest, with the tech-heavy Nasdaq Composite Index down 1,285 points, or 5%, in early-afternoon trading.
The broader S&P 500 dropped 287 points, or 3.7%, and the Dow Jones Industrial Average fell 1,542 points, or 2.9%.
Chip stocks take a beating
Nvidia shares fell 7.5%, a day after dropping 3.2%, making it the heaviest weight on the S&P 500. Advanced Micro Devices tumbled 14.6%, and CoreWeave, which rents cloud access to AI chips, fell 12.1%. Wall Street analyst Adam Crisafulli of Vital Knowledge attributed the selloff to growing "headline" risks around AI.
headline
— Adam Crisafulli of Vital Knowledge
Election results and oil
Market watchers think the Democrats' sweeping electoral victories this week could strengthen opponents of data centers and slow the rollout of facilities that have drawn widespread public opposition.
In other markets, the initial reaction to the election results faded somewhat. Brent crude rose 2.6% to $97.11 a barrel, recovering much of its nearly 9% drop from the day before, with uncertainty remaining over the war with Iran and when the global energy industry can return to normal.
