Wall Street’s midterm celebration lasted one day. Chip stocks got taken to the woodshed Thursday, and the Dow Jones Industrial Average (^DJI) fell 3.4%, 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 closed down 5.5%, and the S&P 500 (^GSPC) lost 4.4%. It was the worst day for both 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. Thursday, the focus shifted to what a Democratic Congress could mean for the AI build-out, and in particular for the data centers driving it.
It was also the S&P 500’s 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%.
24,315.00 -1,421.52 (-5.52%)
At close: 5:15:59 PM EST
^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), in correction territory since Monday, fell 6.4% for its worst day since March 2020. The broader Nasdaq Composite joined it, closing nearly 12% below its Oct. 6 record. Both indexes also closed below their 200-day moving averages for the first time since April. Many traders treat that line as the boundary between an uptrend and a downtrend.
The PHLX Semiconductor Index (^SOX) sank 12%, its worst day since March 2020, leaving it about 38% below its June record.
The S&P 500 shed about $3 trillion in market value. Nvidia (NVDA) alone lost about $450 billion, and chipmakers as a group gave up more than $1.5 trillion.
Memory and storage stocks took the worst of it, with SanDisk (SNDK), Western Digital (WDC), Seagate (STX), and Micron (MU) all suffering steep double-digit losses. AMD (AMD), Marvell (MRVL), Arm (ARM), and Lam Research (LRCX) fell sharply too. Even the biggest names, Nvidia, Broadcom (AVGO), and Taiwan Semiconductor (TSM), fell 9% or more.
The damage spread across the AI supply chain. Cloud provider Nebius (NBIS) fell double digits and CoreWeave (CRWV) nearly 10%, along with networking and optical names Astera Labs (ALAB), Lumentum (LITE), Coherent (COHR), Dell (DELL), Corning (GLW), and Quanta Services (PWR).
Speculative favorites went down with them. Tesla (TSLA), SpaceX (SPCX), Robinhood (HOOD), Coinbase (COIN), and Strategy (MSTR) each fell 9% or more. (Disclosure: Yahoo Finance has a partnership with Coinbase.)
