Nasdaq plunges into correction territory as midterm results raise fresh questions about AI boom
- On Thursday, Nov. 5, the Nasdaq Composite plunged 5.5%, entering correction territory more than 10% below its Oct. 6 record high as investors reassessed artificial intelligence spending following the US midterm elections.
- Following Democrats' midterm gains, investors offloaded shares linked to AI infrastructure, fearing tougher regulation and slower data-center construction in Texas and Georgia, which account for 40% of planned capacity.
- Thursday's sell-off wiped out roughly $1.8 trillion in market value, while the CBOE Volatility Index surged around 70% to 28, reflecting heightened uncertainty across semiconductor and tech-heavy sectors.
- Institutional de-risking accelerated as major hedge funds cut leverage and reduced teams, while markets in Tokyo and Seoul recorded steep losses extending the rout from Wall Street to international exchanges.
- Markets await the October Employment Situation report due Friday, Nov. 6, at 8:30 a.m., as investors monitor whether the AI boom remains on track or faces further consolidation in coming years.
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645 Articles
Nasdaq fell by 6.4% in the middle of the session this Thursday. How to explain it? Quarterly figures for the technology sector have remained good, but do not...
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.
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