Technology selloff deepens

U.S. stocks suffered their sharpest broad retreat in months on Thursday as a renewed selloff in artificial-intelligence and semiconductor shares pushed the Nasdaq Composite into correction territory. Nasdaq's official index page showed the Composite closing November 5 at 24,315, down 1,421.52 points, or 5.52%. That left the technology-heavy benchmark more than 10% below its October 6 record close, the commonly used threshold for a market correction.

Losses spread across major indexes

The decline was not confined to Nasdaq-listed companies. New York Stock Exchange data put the S&P 500 at 7,353.73, down 334.89 points, or 4.36%, while the Dow Jones Industrial Average lost 1,833.06 points, or 3.44%, to 51,523.06. The Associated Press reported that the Russell 2000 dropped about 4.4%, indicating pressure on smaller companies as well as megacap technology names. Thursday's loss also erased the S&P 500's gain from the previous session, though the index remained 7.4% higher for the year.

Related reporting: AI slowdown warnings send Nasdaq futures and chip stocks lower

AI investment assumptions come under pressure

Reuters reported that the Philadelphia Semiconductor Index fell 12.2%, its biggest one-day decline since April 2025. The move reflected growing doubts about how quickly heavy spending on chips, power and data centers will produce returns. Recent earnings and guidance have not fully settled those concerns, and the market's largest AI-linked companies carry enough index weight to amplify swings across diversified portfolios. A prolonged retreat could also change spending plans among equipment suppliers and utilities.

Policy concerns add another variable

The selloff followed Democratic victories in the U.S. midterm elections, which prompted investors to consider whether Congress or state governments could apply greater scrutiny to data-center construction, electricity demand and environmental effects. That political connection remains an assessment rather than a confirmed policy change. No nationwide data-center moratorium has been enacted, and the speed or scope of any legislative response is uncertain.

Defensive positioning appears

The NYSE's market update said selling broadened across all 11 S&P 500 sectors during the session, while lower Treasury yields suggested some demand for government bonds as a defensive asset. Reuters separately said the 10-year Treasury yield was about 4.835% at the close. Bitcoin also weakened during the risk-off move, underscoring that investors were reducing exposure across several volatile asset categories rather than rotating only within equities.

What the correction means

A correction describes the size of a decline from a recent peak; it does not predict how long the retreat will last or whether it will become a bear market. For households holding index funds, the immediate impact comes through lower portfolio values. Retirement accounts with broad U.S. equity exposure are affected even when investors do not directly own semiconductor shares. For technology and data-center companies, a prolonged repricing could raise the cost of equity financing and intensify demands for clearer evidence that large capital programs will generate durable cash flow.

Next data could reshape the outlook

Investors now face a crowded set of economic and policy signals. The October U.S. employment report is due Friday, while Federal Reserve officials are scheduled to speak. Strong labor data could keep interest-rate expectations elevated; weaker figures could deepen concerns about growth. The market's next direction will depend on whether buyers return to AI shares, whether earnings expectations are revised and whether political concerns turn into specific proposals.

Sources

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