Nasdaq plunges into correction territory as midterm results raise fresh questions about AI boom
- On Thursday, November 5, 2026, U.S. stock markets recorded their worst one-day performance since April 2025, with the Nasdaq Composite falling 5.5% into correction territory and wiping out around $2.3 trillion in market value.
- The downturn followed Tuesday's midterm elections, where Democratic victories sparked investor concerns regarding potential regulatory impacts on data center construction and the artificial intelligence infrastructure buildout.
- Chipmakers bore the brunt of the selling, as Nvidia dropped 9% and Advanced Micro Devices plunged 15.5%, contributing to an aggregate loss of more than $1 trillion across major technology firms.
- U.S. stock futures attempted to stabilize on Friday as investors turned their attention to the U.S. Labor Department's October employment report, which economists expect to show 65,000 jobs added.
- Victoria Green, chief investment officer at G Squared Private Wealth, said "the AI trade is not dead here," noting that "buying a volatile dip tends to be good as long as we're still in a non-recessionary period.
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The Nasdaq technology index on Wall Street has partially recovered from yesterday's heavy losses. Investors took advantage of the lower share prices to buy shares again, particularly of chip companies. These had been punished severely out of fear that a Democratic majority in the US Congress could lead to stricter regulations for artificial intelligence and delays in the construction of AI data centers.
New York Stock Exchange is recovering from Thursday's losses. European indices are under pressure. The situation is quite fragile, says chief economist of Moody's Analytics
At the leading AI companies, the previous euphoria gives way to a noticeable disillusionment. However, the global price slip does not mark an end to the boom, but rather a turnaround. Analyst Lipkow emphasizes: The AI cycle grows out of its infancy.
An AI reckoning? Investors brace for potential fallout
Further declines would have wide-ranging financial and economic consequences amid the massive AI spending, much of it fuelled by companies taking on huge amounts of debt. AFP takes a look at how tech sector weakness could impact governments and households. The AI motor Outlays on data centres to train and power artificial intelligence models have become one of the main growth engines for the US economy, the world's largest. "That contributed to …
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