Friday, November 6, 2026
Nasdaq Plunges 5.5% Into Correction as AI Chip Selloff Erases Election Rally
Key Indicators
S&P 500
7,353.73
-4.36% (down)Nasdaq Composite
24,315.00
-5.52% (down)Dow Jones Industrial Average
51,523.06
-3.44% (down)Market Recap
Stocks reverse Wednesday's rally in a broad rout
U.S. stocks sold off hard on Thursday, November 5, wiping out the prior day's post-election rally. The S&P 500 fell 4.36% to 7,353.73, the Nasdaq Composite dropped 5.52% to 24,315.00, and the Dow Jones Industrial Average lost 1,833.06 points, or 3.44%, to 51,523.06. The Nasdaq closed in correction territory, more than 10% below its October 6 record close, in its worst day since April 2025. All eleven S&P 500 sectors finished lower.
AI chip selloff spreads on data-center policy fears
Chip and AI-infrastructure stocks led the decline. The Philadelphia Semiconductor Index fell more than 12%. Nvidia dropped about 9.26%, Micron 17.46%, AMD 17.26%, Marvell 16.43% and Qualcomm 9.49%. Investors weighed what a Democratic sweep of the midterms could mean for AI regulation and data center development, as rising electricity prices have made new data center construction a political issue and some Democrats have called for restrictions or pauses. Analysts said the market now expects the AI infrastructure buildout to become slower and more expensive. Tesla fell about 10.77%, Meta 3.96%, and neocloud names IREN, Applied Digital and Nebius each fell more than 14%.
Single-stock moves and what comes next
Company-specific news still drove some names. AppLovin gained 31.04% after beating profit estimates and Krispy Kreme rose 30.68% after raising its revenue forecast, while MNTN fell 54.68% and Veracyte 54.30% after cutting forecasts. The VIX briefly reached 28.09, its highest since March 31. The October jobs report is due Friday at 8:30 a.m. ET. Closing figures for the 10-year Treasury yield, VIX, oil, gold and bitcoin were not consistently reported across sources, so they are omitted from the indicators.
Concept of the Day
Market Correction
A correction is a decline of at least 10% from a recent peak, but less than 20%, which is the conventional threshold for a bear market. Peaks are measured on closing prices, so the Nasdaq entering a correction means it closed more than 10% below its previous record close. Corrections are common: the S&P 500 has historically had one roughly once every couple of years, and most do not turn into bear markets. Corrections tend to have identifiable causes, such as a shift in interest-rate expectations, an earnings disappointment, or a change in the outlook for a heavily owned theme. When many investors hold the same crowded trade, selling can feed on itself as funds cut risk and leveraged positions are forced to close. The result is often a faster drop in the most popular, highest-valued stocks than in the broader market. The label itself is arbitrary, since 10% is a convention, not a signal. What matters is whether the reason for the decline changes the long-run earnings outlook or only the price investors will pay for those earnings.
Why it matters
The Nasdaq Composite fell 5.52% to 24,315.00 on Thursday, closing more than 10% below its October 6 record, while the S&P 500 fell 4.36% to 7,353.73 and remains less than 10% off its high. The trigger was a repricing of the AI infrastructure trade on fears that a Democratic Congress could slow data center buildout, with the Philadelphia Semiconductor Index down more than 12%. For investors, the key question is whether policy changes the earnings path of AI spenders and suppliers or only trims the multiple, and Friday's jobs report adds a macro data point to a market that has just swung from a 3.03% Dow gain to a 3.44% loss in two days.
What to Watch
Fri, Nov 6
October jobs report (BLS)
It tests whether the labor market is holding up just as stocks are under heavy pressure.
Wed, Dec 9
FOMC rate decision (December 8-9 meeting)
The Fed's next policy decision and updated projections will shape rate expectations for the year-end.