The Nasdaq Composite Index tumbled significantly on Thursday, reversing the substantial gains from the previous trading day; investors continued to sell tech stocks, with funds shifting towards defensive sectors of the market.
The Nasdaq index, which is dominated by tech stocks, tumbled 4.2% and entered a correction zone; the S&P 500 index fell 2.6%. The Dow Jones Industrial Average lost 780 points, a decline of 1.5%. Despite gains from individual stocks such as Chevron and Johnson & Johnson, this index, composed of 30 components, was still unable to avoid the sell-off in tech stocks. The Dow Jones lost approximately half of the gains it made on Wednesday.
Individual stocks related to the artificial intelligence sector, especially those in the chip and data center sectors, fell for the second consecutive trading day. There are concerns in the market that if Democrats take control of both houses of Congress and win multiple key governorships, it could slow down the progress of AI computing power infrastructure construction across the United States.
On Thursday, chip stocks Broadcom and NVIDIA both fell by 7%; software company Oracle saw a decline of nearly 5%. Tesla, owned by Elon Musk, and SpaceX each tumbled by 9%. Another chip company, Qualcomm, met its earnings targets, but its performance outlook fell short of expectations, resulting in a 9% drop in its stock price.
Affected by concerns about policy risks stemming from the results of mid-term elections and public referendums in various states, the stock prices of emerging cloud computing power vendors have collectively plummeted: CoreWeave has fallen by 12%, Nebius has fallen by 17%, and Iren has fallen by 15%.
Below the market overview, other sectors of the market showed relatively stronger resistance to declines. The essential consumer goods sector rose by over 1%, and the healthcare and utilities sectors also closed higher.
Wednesday's trading reflected investors digesting the results of the mid-term elections: the Democratic Party gained a solid majority in both the Senate and the House of Representatives. The Dow Jones Index recorded its best single-day performance since April 2025, while the S&P 500 and the Nasdaq Composite Index both rose by more than 1%.
Tandem Investment Advisor and Portfolio Manager Jordan Watson stated that the previous sharp rise in market prices, as well as the withdrawal of funds from the AI sector, may merely be temporary phenomena.
"Investors are digesting the election results and the potential policy implications, so market volatility is likely to rise further," he said. "I don't view Wednesday's stock market performance as a signal that all risks have been eliminated; on the contrary, it serves as a reminder for the market to rationally assess the massive capital flowing into AI infrastructure projects and whether these investments will deliver returns that meet investors' expectations."
Affected by market expectations that the Democratic Party may use their newly gained political leverage to pressure President Trump to end the Iran war, U.S. crude oil prices fell on Wednesday; however, oil prices reversed their trend on Thursday. WTI Crude oil futures rose by more than 1% on Thursday, approaching $90 per barrel; Brent crude oil rose by more than 2%, to around $97 per barrel.
