Nasdaq Faces Biggest One-Day Drop in 19 Months as AI Stocks Slide
The Nasdaq Composite was on track for its steepest one-day decline in 19 months on Thursday, as chip stocks sank on fears that a new. Nasdaq Faces Biggest One…
The Nasdaq Composite was on track for its steepest one-day decline in 19 months on Thursday, as chip stocks sank on fears that a new political balance in Congress could slow the expansion of artificial intelligence infrastructure. The losses also put the index near confirmation of a correction.
Nvidia fell almost 9%, while the Philadelphia Semiconductor Index dropped more than 10%. The Nasdaq 100 was down more than 10% from its October closing high, a threshold that marks correction territory.
Infrastructure growth in focus
Democrats’ gains in Tuesday’s elections, including in states where data-center expansion has become contentious, unsettled investors. The concern is that tighter rules could slow the buildout of the computing facilities and other infrastructure supporting AI—a growth story that has helped drive technology stocks to record highs this year.
Some newly elected lawmakers and governors are seeking to curb the pace of AI infrastructure development, Melissa Brown, SimCorp’s global head of investment decision research, said. A complete halt appears unlikely, she said, but even a slowdown could challenge investors’ expectations because rapid infrastructure growth has underpinned the AI trade.
The political shift initially prompted a post-election rally. By Thursday, however, investors were reassessing what it could mean for technology companies and the next phase of the trade.
Losses spread across AI-related stocks
The decline extended beyond major chipmakers. SanDisk, Western Digital, AMD, Seagate Technology and Micron were among the S&P 500’s biggest losers. Data-center and AI infrastructure companies, including Vertiv and Quanta Services, fell by double-digit percentages and were poised for a second consecutive session of losses.
The Nasdaq’s prospective daily drop would be its largest since President Donald Trump’s “Liberation Day” tariff announcement in April 2025. Separately, Wall Street’s fear gauge recorded its biggest jump since that announcement as the AI trade faltered.
Investors are now weighing whether political pressure will translate into slower infrastructure growth—and what that could mean for the companies whose shares surged on expectations of continued AI investment. Nvidia’s near-9% decline underscored the scale of Thursday’s retreat.
