Nasdaq Closes in Correction Territory With Biggest One-Day Drop Since April 2025 as Chip and AI Stocks Crater

The Nasdaq Composite closed down about 5.5% at roughly 24,315 on Thursday, November 5, ending the session more than 10% below its October 6 record-high close and confirming a technical correction, according to Reuters' closing report. Reuters had flagged during the session that the index was on track for its deepest one-day drop in 19 months, the worst since the April 2025 tariff shock. The S&P 500 fell about 4.4% to roughly 7,354 and the Dow lost about 3.4%, wiping out Wednesday's post-election rally of more than 1,500 points. Volume was heavy, at 26.9 billion shares against a 17.7 billion average over the prior 20 sessions.

The selling was concentrated in the stocks that led the AI trade. Memory and storage names fell hardest: MU closed down 17.5%, while SNDK and WDC fell about 19% and 16.5% respectively, extending a slide that social-media trackers had already flagged as double-digit losses across Micron, Sandisk, Western Digital and Seagate by midday. AMD was down 15.3% intraday, the iShares Semiconductor ETF lost 10.7%, and the VIX jumped 61% to 26.72, its highest level since March. NVDA fell about 9%, and the Philadelphia Semiconductor index dropped more than 10%. TSLA closed down about 9.4% at $348.85.

The trigger was political rather than fundamental. Democrats won control of Congress on Tuesday, including in states where opposition to data-center construction is mounting, and Reuters reported that this fueled concerns that tighter regulation could slow the AI infrastructure buildout; one portfolio manager described it as a capitulation phase for data-center beneficiaries. Valuations are not what is driving the move: Yahoo Finance noted Micron now trades at about 4.8 times forward earnings and Sandisk at about 4.9 times, against roughly 18.5 times for the S&P 500, yet both kept falling. Rate risk added pressure, with Fed officials Hammack and Barkin hinting at possible further hikes ahead of Friday's payrolls report.

What to watch: whether the AI selloff spreads beyond chips and data-center plays into the broader market, how Friday's jobs data shapes rate expectations, and whether hyperscalers or chipmakers address capex plans in light of the election result. The Nasdaq 100 had already confirmed its own correction on Monday, so Thursday's move extends a drawdown that was underway before the vote.