Wall Street’s midterm celebration lasted one day. Chip stocks are getting taken to the woodshed Thursday, and the Dow Jones Industrial Average (^DJI) is heading for its worst second session after a midterm election in data going back to its start in 1896.
It took the Nasdaq Composite (^IXIC) six minutes to erase its entire post-election rally. Then the selling got worse.
The tech-heavy index is down more than 5% in late-morning trading, and the S&P 500 (^GSPC) is off more than 3%. Both are on pace for their worst day since the April 2025 tariff crash.
Investors bought stocks Wednesday after Democrats won control of both chambers of Congress, helped by falling oil prices and lower Treasury yields. Now the focus is on what a Democratic Congress could mean for the AI build-out, and in particular for the data centers driving it.
The S&P 500 is on pace for its worst second day after a midterm in data going back nearly a century. The previous low came in 2002, when the index fell about 2.3%.
24,574.75 -1,161.76 (-4.51%)
As of 12:22:30 PM EST. Market Open.
^IXIC ^SOX
This week has an echo from 1896. The day after William McKinley won the White House that November, the Dow jumped about 4.5%, then gave back about 2% the next session. On Wednesday, the Dow jumped 3%, its best day after a midterm since 1982.
The Nasdaq-100 (^NDX) closed in correction territory Monday, more than 10% below its Oct. 6 record. The broader Nasdaq Composite is on track to join it. Both indexes are trading below their 200-day moving averages, a line many traders treat as the boundary between an uptrend and a downtrend. Neither has closed below it since April.
The PHLX Semiconductor Index (^SOX) is down about 10%, leaving it more than a third below its June record.
The S&P 500 has shed more than $2 trillion in market value. Nvidia (NVDA) alone is down more than $400 billion, and chipmakers as a group have lost well over $1 trillion.
Memory and storage stocks are taking the worst of it, with SanDisk (SNDK), Western Digital (WDC), Seagate (STX), and Micron (MU) all posting steep double-digit losses. AMD (AMD), Marvell (MRVL), Arm (ARM), and Lam Research (LRCX) are down sharply too. Even the biggest names, Nvidia, Broadcom (AVGO), and Taiwan Semiconductor (TSM), are falling near 10%.
The damage is spreading across the AI supply chain. Cloud providers Nebius (NBIS) and CoreWeave (CRWV) are also down double digits, along with networking and optical names Astera Labs (ALAB), Lumentum (LITE), Coherent (COHR), Dell (DELL), Corning (GLW), and Quanta Services (PWR).
Speculative favorites are going down with them. Tesla (TSLA), SpaceX (SPCX), Robinhood (HOOD), Coinbase (COIN), and Strategy (MSTR) are each down over 10%. (Disclosure: Yahoo Finance has a partnership with Coinbase.)
