The Nasdaq correction arrived on Thursday, when the Nasdaq Composite closed 5.5% lower at 24,315.00 and erased the rally that followed the midterm elections. Chip stocks led the damage. Nvidia fell 9.26% to $181.60, AMD dropped 17.26% to $404.40 and Broadcom lost 10.43%, according to BigGo.
The index now sits more than 10% below its record close from October. A drop of that size from a recent high is the standard definition of a correction, and CNBC's live coverage described the Nasdaq as having tumbled into correction territory on what it called an AI tech wreck.
How far the Nasdaq correction went
The Dow fell about 1,830 points, according to Markets News, reversing the post-election gains from the previous session. The decline was not a brief dip. At 11:23 a.m. Eastern, the Nasdaq was down 4.71%, and Proactive reported that more than $2 trillion in market value had disappeared within 50 minutes of the open.
Both the Nasdaq and the S&P 500 posted their worst intraday performance since April 4, 2025. Investing.com called it the worst day for U.S. stocks since April 2025.
The index is still up roughly 5% for the year, according to the Epoch Times. That gain puts Thursday in context, but it does not erase the rally's damage in the most recent weeks.
This is the third correction of 2026. The Nasdaq entered correction in March and again in July, and it recovered to new records both times, according to BigGo's summary of market data.
Which chip stocks took the heaviest losses
Chip stocks drove the decline. CNBC reported that the group had its worst day since March 2020, and the iShares Semiconductor ETF fell close to 11%. Startup Fortune put a semiconductor ETF down more than 12%, so the exact figure depends on the source and timestamp.
| Stock | Move on Nov. 5 | Detail |
|---|---|---|
| Nvidia | Down 9.26% | Closed at $181.60; about $374 billion lost versus Wednesday's close |
| AMD | Down 17.26% | Closed at $404.40 |
| Broadcom | Down 10.43% | Closed at $291.53 |
| Qualcomm | Down about 9% | Fell despite a quarterly beat |
The losses reached beyond chips. CNBC's figures put Tesla's market-value loss at roughly $161 billion and Microsoft's at about $117 billion. Software companies most tied to the AI build-out also sold off, and Oracle declined as well, according to Yahoo Finance's live coverage.
Nvidia's exposure to AI financing has been a concern for weeks. For background, see our earlier look at neocloud financing risk.
Why investors are tying the drop to the midterms and AI rules
Investors appear to have reacted to two developments at once: the Democratic sweep of the midterm elections and expectations of tougher AI regulation. The Epoch Times described a federal and state blue wave as the trigger for worry that the AI boom could be threatened.
Lawmakers have pushed for more AI regulation, and some have called for a moratorium on data-center construction. Data-center operators and AI infrastructure companies took some of the hardest hits, which fits that concern.
The fears are aimed at the buildout itself, and that matters beyond Wall Street. Local zoning boards and utilities planning new power supply would feel any rule that slows construction first.
Two caveats matter. None of the sources reviewed confirmed a single cause for the selloff, and none identified a specific federal or state bill that has been introduced or passed.
When strong earnings did not save the stock
AMD sold off even after reporting third-quarter revenue of $13.4 billion, up 45% from a year earlier. Data-center revenue rose 97% to $8.55 billion, according to a report carried by Coinpaper, citing AP.
Qualcomm's case was different. Its quarterly results beat estimates, but its outlook disappointed investors, and the stock fell about 9%, according to Proactive.
Taken together, the moves suggest investors were not trading on last quarter's numbers. They were pricing in the next stretch of AI spending and the rules that could govern it.
Is this the start of a longer AI downturn?
That question is the central one, and the sources do not settle it. The Nasdaq's earlier 2026 corrections both reversed into new highs. A Reuters analysis cited by BigGo found that the Composite has entered correction roughly once every 1.8 years, so corrections alone do not signal a lasting downturn.
The size of Thursday's chip-stock move is harder to dismiss. Chip stocks posted their worst day since March 2020, which is a sharper break than a routine pullback.
Nvidia reports quarterly results later this month. One report cites Nov. 17, but that date should be confirmed directly with the company before anyone plans around it. Earnings from the largest technology companies will also test whether their AI spending plans still hold, as our coverage of this week's Big Tech earnings explains.
What investors with retirement accounts should check
- Check how much of your 401(k), IRA or brokerage account sits in semiconductor funds, AI-heavy stocks or funds that track the Nasdaq. Overlap is often larger than it looks.
- Compare your allocation with your time horizon. Money you need within a few years generally belongs in steadier holdings than money you will not touch for decades.
- Avoid irreversible trades based on one day's move. Selling after a 5% drop locks in losses if the market recovers, as it did after the earlier 2026 corrections.
- Decide in advance how and when you will rebalance, then follow that plan rather than reacting to headlines.
This is general information, not individual financial advice. A fee-only financial planner can review your holdings against your goals.
What to watch next
Three things will tell investors more than Thursday's close. The first is whether the Nasdaq climbs back above the correction line and whether chip stocks keep falling. The second is Nvidia's earnings date and results. The third is whether any lawmaker introduces a concrete bill on AI regulation or data-center construction.
Until those answers arrive, use official exchange and index closing data as the reference point. Intraday figures varied widely across reports on Thursday, and closing numbers are the ones that will define the record.
