Nov. 5, 2026, 10:32 AM EST / Updated Nov. 5, 2026, 10:58 AM EST
Shares in technology companies dropped sharply Thursday, compounding recent declines and sparking concerns about the durability of an artificial intelligence boom that has driven much of recent U.S. economic growth.
The tech-focused Nasdaq 100 index dropped more than 6% in midmorning trading, to its lowest level in five months.
The S&P 500 also fell 3.5%, putting it on track for its worst day since April 2025, when President Donald Trump’s global tariffs rocked markets. The S&P 500’s drop erased nearly $2.5 trillion in wealth from the index.
Memory and chip firms SanDisk, Western Digital, AMD, Seagate and Micron were the index’s biggest losers, all plunging around 10%.
The broader Nasdaq Composite, which tracks more than just tech stocks, also entered “correction” territory on Thursday, which is when a stock or index declines at least 10%.
Tech stocks have surged in recent years as excitement about artificial intelligence has fueled billions of dollars in investments in, and by, the companies that make chips and infrastructure necessary for its development and operation.
Since Election Day 2024, the Nasdaq has surged almost 40%.
But questions about whether AI will enable the kind of productivity necessary to generate returns on those investments have grown louder in recent months.
Also contributing to losses were the commanding Democratic victories across the country in Tuesday’s midterm elections.
Numerous Democrats who won races for governor, attorney general and Senate and House seats have pledged to slow or halt the construction of AI data centers.
Texas, Ohio, Michigan and Georgia were of particular concern, because they are all large data center markets.
Major established cloud computing providers Alphabet, Meta, Amazon and Microsoft also fell, but less than the overall market declines.
Elon Musk’s companies SpaceX and Tesla each slid around 10%, largely in response to the midterm results.
Musk, the world’s first trillionaire, spent hundreds of millions to help elect Republican midterm candidates. Until Tuesday’s rout, he was seen as one of the largest potential beneficiaries of Republican victories.
Now that voters have so resoundingly rejected the GOP, Musk and his companies face the prospect of tighter regulation and even potential investigations at both the state and federal levels.
The sell-off was triggered by two lackluster earnings reports from major chipmakers, Qualcomm and Arm Holdings, which were released on Wednesday night. Both companies posted results that investors generally viewed as mixed.
In early trading, the two companies led the Nasdaq indexes lower. Qualcomm tumbled 9%, while Arm Holdings slipped around 15%.
Earnings reports like these have rattled investors in recent months because of the hundreds of billions of dollars that are being poured into the AI sector.
Amid the sell-off Thursday, investors sought safer places for their money, sending the S&P 500’s consumer staples, health and utilities sectors higher.
Oil prices rebounded from Wednesday’s drop. As of midmorning trading, Brent crude oil neared $100 per barrel again after falling below the key psychological level a day earlier.
U.S. Treasury yields, which have faced some competition from tech giants tapping the bond markets to raise funds for their AI ambitions, were generally flat.
The Dow Jones Industrial Average dropped nearly 700 points. The biggest contributor to the Dow’s drop was Nvidia, which sold off by 7%, its largest one-day decline since April 2025.
Nvidia is the most important supplier to any AI firm, but as investors raise questions about returns, the euphoria in the industry is fading. Nvidia’s shares have tanked 15% over the past three months.
Dow components Cisco and Caterpillar, which are both major suppliers to AI data centers, also dropped around 5%.
