Wall Street loses $3 trillion as chip stocks plunge

Wall Street erased roughly $3 trillion in market value on Thursday, marking the steepest single-day loss since April 2025.

Indexes tumble as chipmakers lead the sell-off

The Nasdaq Composite closed at 24,315.00, more than 10 percent below its October 6 record of 27,599.89.

Semiconductor giant Nvidia dropped 9.3 percent, turning negative for 2026 and now sits 2.6 percent lower year-to-date. AP noted that a 1 percent move in Nvidia influences the S&P 500 more than almost any other stock.

The Philadelphia Semiconductor index plunged over 12 percent. Advanced Micro Devices tumbled 17.3 percent and Broadcom slid 10 percent, while smaller AI-focused firms CoreWeave and Applied Digital fell nearly 10 percent and more than 14 percent respectively.

Broad-based tech weakness followed. Meta Platforms fell 4 percent; Amazon.com and Alphabet each slipped 2.2 percent. All eleven S&P 500 sectors ended the session in the red.

The information-technology sector dropped 7.30 percent, its worst daily performance since March 16, 2020, CNBC reported.

Market mechanics and investor sentiment

Trading volume reached 26.9 billion shares, well above the 20-session average of 17.7 billion. The Cboe Volatility Index surged 11.75 points to an eight-month high of 28.36 before settling at 28.18, the largest intraday jump in more than 18 months.

Leveraged exchange-traded funds were expected to dump about $47 billion of stocks into the close, Nomura said, the second-largest amount in its data dating back to July 2006.

Large multi-strategy hedge funds suffered “significant” losses, Goldman Sachs reported, after exposure to AI-related equities turned sour.

Retail investors were on track for their biggest single-stock selling day since the COVID-related crash, Vanda Research’s Viraj Patel noted. “On a typical sell-off, retail buy the dip. Today, that bid has effectively disappeared from individual names,” he said.

Political backdrop and future outlook

Democrats secured control of both chambers in the November 3 midterms, a development that coincides with growing opposition to new data-center projects in several states. Texas governor-elect Gina Hinojosa campaigned on a temporary data-center moratorium and on removing certain tax incentives.

Melissa Brown of SimCorp said investors appear to be recognizing that newly elected officials may seek to curb the pace of AI infrastructure development, raising concerns because the sector’s growth has depended on rapid build-out.

Jed Ellerbroek of Argent Capital Management described the move as “the capitulation phase for the data-center capex beneficiary stocks, especially the semiconductors,” adding that the magnitude of the moves is outsized.

The 10-year U.S. Treasury yield fell to 4.84 percent from 4.90 percent on Wednesday. Cleveland Fed president Beth Hammack and Richmond Fed chief Thomas Barkin hinted at possible future rate hikes, while October nonfarm payroll data are due Friday.

Despite the sell-off, the S&P 500 remains up 7.4 percent in 2026, and the Nasdaq is up 4.6 percent year-to-date.