Investors faced a brutal sell‑off on Thursday, led by shares tied to the build‑out of artificial‑intelligence data centers. The decline erased the market’s gain from the previous day, which had been the best in three months.
Market numbers reflect policy pressure
The S&P 500 fell 4.4%, marking its worst day since President Trump’s “Liberation Day” tariffs in April 2025. The Dow Jones Industrial Average dropped 1,833 points (3.4%), while the Nasdaq composite sank 5.5%.
Tech‑heavy Nasdaq, home to many AI‑related stocks, fell 11.9% below its recent all‑time high. Traders label a loss of more than 10% a “correction.”
AI stocks bear the brunt
Shares of Nvidia, the chip maker that has become the face of the AI boom, slid 9.3% and now sit down 2.6% for the year after three years of double‑digit gains. Advanced Micro Devices fell 17.3%, CoreWeave dropped 9.8%, and GE Vernova, a supplier for data‑center power, sank 7.5%.
Because AI chip stocks carry outsized weight in the S&P 500, a 1% move in Nvidia influences the index more than most other U.S. stocks.
Midterm elections add uncertainty
Tuesday’s nationwide Democratic victories raised the prospect that state and local governments could pause new data‑center projects. Voters across party lines expressed wariness about AI and the rising electricity bills that data centers generate.
Any slowdown would cut demand for AI chips and related services, which have been a major engine of U.S. economic growth.
Positive earnings amid the chaos
Not all companies suffered. AppLovin jumped 31% after reporting revenue and profit that beat analysts’ expectations, and it announced a $3.2 billion stock‑buyback program, bringing the total potential repurchase to $3.6 billion.
Fashion retailer Tapestry, owner of Coach and Kate Spade, rose 7.1% after delivering stronger‑than‑expected profit and raising its revenue and earnings forecasts for the fiscal year.
Broader market context
Overall, the S&P 500 fell 334.89 points to 7,353.73, the Dow closed at 51,523.06, and the Nasdaq ended at 24,315.00.
In commodities, Brent crude rose 3.9% to $98.29 per barrel, recovering part of a near‑9% drop from the day before. Treasury yields continued to fall, with the 10‑year rate slipping to 4.84% from 4.90%.
Despite the market dip, some economic data remain encouraging. Unemployment benefit applications declined last week, and a productivity report suggested U.S. workers are becoming more efficient than economists had forecast, offering a potential boost to growth without adding inflationary pressure.
International markets echo the trend
South Korea’s Kospi index tumbled 5.3%, and Japan’s Nikkei 225 fell 1.8% as tech and AI‑related stocks slipped. In Europe, London’s FTSE 100 dipped 0.4% after the Bank of England raised its main interest rate for the first time in three years, citing the ongoing Iran conflict as a factor in global oil and inflation dynamics.
Bank of England Governor Andrew Bailey said, “We’ve seen encouraging news in the past 48 hours, but the best outcome remains a resolution of the Middle‑East conflict.”
Original reporting: NBC Connecticut — read the source article.
