Nasdaq Sinks 4% as Investors Retreat From AI Trade After Election -- WSJ

By Chelsey Dulaney and Vicky Ge Huang

Stocks are falling sharply Thursday, as some of this year's most popular artificial-intelligence trades are unwinding.

Faced with a potential regime shift in markets after the midterm elections, investors are now positioning for a slowdown in the AI buildout, knocking shares of chipmakers and data-center suppliers hardest in a broad-based selloff.

Nasdaq sank about 4%, putting it on pace to enter a correction, generally defined as a 10% decline from a recent high.

Other stocks are also giving up some of Wednesday's post-election gains. The Dow is down about 1,100 points, facing its second consecutive four-digit decline. The S&P 500, down nearly 3%, is on pace for its worst day since early April 2025, when markets freaked out about President Trump's Liberation Day tariffs.

Earnings from Qualcomm, which reported a drop in revenue Wednesday night, didn't help. "Yesterday was a relief rally, and today's more about investors being disappointed in Qualcomm earnings and the continuation of the rotation trade away from AI," said Keith Buchanan, senior portfolio manager at Globalt Investments.

Stock indexes across Europe held up better. They got a boost from oil prices, which tumbled Wednesday as investors unwound bets that Trump would escalate the war on Iran after the midterms. Oil is rebounding somewhat but Brent crude remains well below $100 a barrel.

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(END) Dow Jones Newswires

November 05, 2026 12:06 ET (17:06 GMT)