Wall Street suffered a brutal sell-off Thursday, led by a sharp decline in stocks tied to the artificial intelligence infrastructure boom. The S&P 500 tumbled 4.4%, or 334.89 points, to close at 7,353.73, marking its worst single-day drop since President Donald Trump's "Liberation Day" tariffs rattled markets in April 2025. The Dow Jones Industrial Average fell 1,833.06 points, or 3.4%, to 51,523.06, while the tech-heavy Nasdaq composite sank 5.5%, or 1,421.52 points, to 24,315.00, pushing the index 11.9% below its all-time high and into correction territory.
The rout erased the market's gains from the previous session, which had been its best in three months. Nvidia, the chipmaker at the center of the AI rally, plunged 9.3% and was the heaviest drag on the S&P 500; the stock is now down 2.6% for the year after three consecutive years of massive gains. Other AI-exposed names fared worse: Advanced Micro Devices dropped 17.3%, cloud provider CoreWeave fell 9.8%, and power equipment supplier GE Vernova slid 7.5%. Because these companies have grown so large, their moves carry outsized influence on the broader index.
Global markets felt the pressure, with South Korea's Kospi index tumbling 5.3%. The selling pressure reflects months of worry that rising borrowing costs could slow the construction of expensive AI data centers and that valuations had entered bubble territory. Tuesday's midterm elections, which delivered nationwide victories for Democrats, added a new political risk: the possibility of government-forced pauses on data center construction. Voters across party lines have expressed wariness about AI and frustration over rising power bills linked to the facilities.
A slowdown in data center build-out would mean fewer purchases of chips, electricity, and related services that have been driving a significant portion of U.S. economic growth. Thursday's losses were broad-based, with morning gains across the majority of stocks evaporating by the close. Among the few gainers, AppLovin surged 31% after reporting better-than-expected revenue and profit and announcing a $3.2 billion stock buyback expansion. Tapestry, owner of Coach and Kate Spade, rose 7.1% on strong earnings and raised forecasts.
Sources: Las Vegas Review-Journal
Original reporting: Las Vegas Review-Journal →
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