US stock markets witnessed a sharp sell-off on November 5, as technology and semiconductor shares slumped, wiping out much of the gains recorded during the previous session. The Nasdaq Composite fell more than 5% during the trading day, while the Dow Jones Industrial Average and S&P 500 also registered steep losses.
The downturn hit companies linked to artificial intelligence (AI), semiconductor manufacturing and data-centre infrastructure particularly hard. Investors grew increasingly concerned about the future pace of AI investment, the cost of expanding data centres and the possibility of tighter regulatory scrutiny following the US midterm elections.
Nasdaq Enters Correction Territory as Wall Street Sells Off
The technology-heavy Nasdaq Composite dropped approximately 5.2% on Thursday, moving more than 10% below its record closing high in October and into correction territory.
The S&P 500 fell around 3.9%, marking its steepest decline since April 2025, while the Dow Jones Industrial Average lost nearly 1,700 points, or about 3.1%, during the session.
The sell-off followed a strong rally on Wednesday, when the Dow surged more than 1,500 points. Thursday's reversal erased those gains and renewed concerns about volatility across US financial markets.
Nvidia, AMD and Other Chipmakers Face Heavy Losses
Semiconductor companies were among the biggest casualties as investors reassessed expectations for AI-related spending.
Nvidia shares fell approximately 8.7%, while Advanced Micro Devices (AMD) plunged around 15.5%. SanDisk also suffered a steep decline, losing more than 19% during the session, according to market reports.
The broader semiconductor sector experienced widespread selling, with companies involved in chip manufacturing, AI hardware and data-centre equipment facing mounting pressure.
Qualcomm also came under pressure after its outlook disappointed investors despite better-than-expected results in some areas. The developments added to concerns about smartphone-chip demand and the earnings prospects of technology suppliers.
AI Investment Concerns Trigger Fresh Market Jitters
One of the major factors behind the sell-off was growing uncertainty surrounding the enormous investments being made in artificial intelligence infrastructure.
Technology companies have committed substantial sums to data centres, advanced processors, cloud computing and supporting infrastructure. However, investors are increasingly questioning how quickly these investments will generate sufficient revenue and profits.
The possibility of slower data-centre expansion has become another concern. AI infrastructure requires substantial electricity, water, land and financing, and any increase in costs or restrictions on new projects could affect the industry's growth outlook.
These concerns have put pressure on companies that supply semiconductors, servers and other equipment essential to AI development.
US Midterm Election Results Add to Uncertainty
The US midterm election results added another layer of uncertainty for technology investors. Democratic victories in Congress and key gubernatorial races raised questions about whether future policies could increase scrutiny of data-centre construction and the rapid expansion of AI infrastructure.
Investors are assessing whether changes in political control could lead to tighter rules, higher operating costs or delays in new projects. Although a complete halt to data-centre development appears unlikely, even a slowdown could affect expectations for semiconductor demand.
Market participants are therefore reassessing whether current valuations adequately reflect the risks associated with the AI investment boom.
Big Tech Shares Also Come Under Pressure
The losses extended beyond semiconductor manufacturers. Several major technology companies also recorded declines as investors reduced exposure to growth-oriented stocks.
Microsoft, Amazon and other companies with significant investments in AI infrastructure faced pressure during the broader market downturn. The sell-off reflected concerns about both the cost of future investments and the time required to turn those investments into sustainable profits.
Higher borrowing costs and persistent geopolitical uncertainty have further complicated the outlook for businesses planning large-scale infrastructure projects.
What Investors Will Watch Next
The latest market decline highlights the sensitivity of technology valuations to changes in expectations around AI spending, regulation and corporate profitability.
Investors will closely monitor upcoming economic data, company earnings and management commentary for clues about the strength of demand and the sustainability of AI-related capital expenditure.
For now, the sharp fall in the Nasdaq and semiconductor shares signals a period of heightened uncertainty for Wall Street. Whether the sell-off deepens or markets recover will depend partly on whether investors regain confidence in the long-term returns expected from the AI boom.
