Markets
Chip rout drags Nasdaq down almost 5% as US stocks surrender post-election gains
A sell-off in semiconductor and AI stocks hit all the major US indexes a day after Democrats won both chambers of Congress.
HedgeWeekly News Desk ·
US stocks fell sharply on Thursday, with chip and AI shares leading the decline. In a market wrap published after the US session, the Dow Jones Industrial Average stood at 51,861.18, down 2.81%, and the S&P 500 at 7,410.86, down 3.61%. The Nasdaq Composite fell 4.79% to 24,502.75, the Nasdaq 100 lost 5.42% and the Russell 2000 dropped 4.10%.
Intraday reports put the PHLX Semiconductor index down about 10% at its low, with Nvidia, Micron, Broadcom and AMD among the hardest hit. Qualcomm also fell after its quarterly results, and software names such as Palantir and CrowdStrike dropped more than 10% at their lows. The Cboe Volatility Index jumped more than 65% to as high as 27.45, and the S&P 500 had shed more than $2 trillion in value by mid-morning. Market reports tied the move to investor worries about the AI build-out and data-centre spending, including the prospect of tighter regulation under a Democratic Congress. AMD chief executive Lisa Su said the market can sometimes be short-sighted and that she still sees strong AI demand.
Outside equities, Treasury yields fell across the curve: the 2-year yield dropped 9.2 basis points to 4.489% and the 10-year fell 5.7 basis points to 4.835%. Spot gold rose 1.2% to $4,109.17 an ounce, while bitcoin fell 5.56% to about $75,960. The Nasdaq Composite slipped below its 200-day moving average, and the Dow's drop was reported as its worst second session after a midterm election since 1896.
For funds and allocators, the day tests how crowded AI and semiconductor positions have become. Investors will look for whether the sell-off reflects a policy repricing or a broader unwind, and Friday's US jobs report is the next scheduled data point. Prime-broker and fund-performance data in coming days should show how much of the damage fell on long-heavy tech portfolios.