Wall Street witnessed a sharp selloff on Thursday, with the Nasdaq Composite falling 5.2% as investors retreated from artificial intelligence-linked stocks amid concerns over massive AI infrastructure spending and the potential impact of the US midterm election results.
The S&P 500 fell 3.4%, while the Dow Jones Industrial Average declined 2.2%. The selloff erased gains made in the previous session, when US stocks rallied following sweeping Democratic victories in the midterm elections.
Semiconductor stocks bore the brunt of Thursday's losses, with the Philadelphia Semiconductor Index plunging 11%, its steepest decline in years. Qualcomm shares fell 11% after the chipmaker reported weaker-than-expected smartphone chip sales, adding to pressure on the sector.
Nvidia shares dropped 7.5%, while Advanced Micro Devices plunged 14.6%, reflecting the broader retreat from companies seen as major beneficiaries of the artificial intelligence boom.
The pressure on AI-related stocks also reflected concerns that the election results could change the regulatory environment for the industry. Democrats' victories in both chambers of Congress have raised the possibility of greater scrutiny of data centre expansion, particularly in states where opposition to new projects has been growing.