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🚨 The Nasdaq Just Fell 5% and Chip Stocks Nearly 11% as the AI Trade Cracked

The Nasdaq fell about 5% and chip stocks nearly 11% by 11am ET Thursday, on course for the worst day since April 2025.

By Tech Arcade··2 min read

The Nasdaq Just Fell 5% and Chip Stocks Nearly 11% as the AI Trade Cracked — Tech Arcade
Photo: Austin Distel / Unsplash

The Nasdaq Composite was down about 5% by 11am New York time on Thursday, as chip stocks fell nearly 11% in one session (Reuters).

If those losses hold, the Nasdaq-100 alone sheds more than $2.2 trillion in market value. Both the Nasdaq and the S&P 500 were on course for their biggest one-day drop since April 2025.

These are intraday figures from about 11am ET, and the market was still open when this was published. Closing numbers may differ.

⚡ What Happened

  • The indexes: the Nasdaq lost 4.95%, the S&P 500 lost 3.2% and the Dow lost 1,146 points, or about 2.1% (Reuters).
  • The AI names: AMD fell 15.9%, CoreWeave 14.9%, GE Vernova 9.1% and Nvidia 8.3% (AP).
  • The rest: Qualcomm dropped 13.5% after missing estimates for smartphone chip sales. Tesla and SpaceX each fell more than 10% (Reuters).

The whiplash is the strange part. Wednesday was the S&P 500’s best day in three months (AP). Not everything sank, either: about two in five S&P 500 stocks were up, and AppLovin jumped 30.2% on strong results.

🧠 Why It Matters

For more than a year, one bet has powered this market: everybody keeps building AI data centers, and everybody keeps buying chips to fill them. Thursday’s selling is investors questioning that bet from two directions at once.

Politics is the first. Democratic wins in Tuesday’s midterms, including in key data-center states, raised the possibility of tighter AI rules and government-forced construction pauses. So far that is a possibility, and no such pause has been announced.

Money is the second. AP reports that investors worry expensive borrowing could slow the buildout. Two Federal Reserve officials hinted at possible rate hikes on Thursday, and traders already expect one next month.

If you hold a tracker fund, you probably own this selloff: chip and AI giants carry a lot of weight in the big indexes.

🔜 What To Watch

  • The close. The Nasdaq is on track for a correction, meaning a 10% fall from its October 6 record close. The Nasdaq-100 confirmed one on Monday.
  • Friday’s jobs report. October payrolls land tomorrow, and a strong number would feed rate-hike fears.
  • November 17. That’s when Nvidia reports, and its results will be a major test of whether AI chip demand has changed.

Sources

❓ Quick answers

Why did the Nasdaq fall on November 5, 2026?

Reuters and AP tied the drop to fears that AI data-center building could slow, because of possible tighter rules after Democratic midterm wins and expensive borrowing. The Nasdaq was down about 5% by 11am ET.

How much did chip stocks fall on November 5, 2026?

The Philadelphia Semiconductor index was down nearly 11% by 11am ET, according to Reuters. AP reported AMD down 15.9% and Nvidia down 8.3%.

Is the Nasdaq in a correction?

On Thursday's intraday figures, Reuters said the Nasdaq Composite was on track for a correction, a 10% fall from its October 6 record close. The Nasdaq-100 had already confirmed one on Monday.