Nasdaq falls over 3 per cent as tech stocks decline
US markets tumbled on Thursday as investors sold technology shares following Democratic victories in the midterm elections.
US stocks fell on Thursday, with the Nasdaq Composite dropping more than 3 per cent as investors sold off technology shares. According to The Economic Times, the decline was driven by fears that the midterm-victorious Democrats might limit the artificial intelligence (AI) and data centre boom.
The tech-heavy Nasdaq Composite fell 3.3 per cent, while the S&P 500 dropped 1.9 per cent. The Dow Jones Industrial Average decreased by 489 points, or 0.9 per cent, and the Nasdaq 100 fell by more than 5 per cent in a single day.
Semiconductor and data centre-related stocks saw a second day of heavy selling. The Philadelphia Semiconductor Index (SOX) dropped as much as 10.22 per cent, with Nvidia, Advanced Micro Devices (AMD), Intel, and Marvell Technology among the leading decliners.
Tesla shares fell 9.5 per cent, while SpaceX slipped 6.7 per cent and Meta lost 6.6 per cent. Qualcomm shares plunged 9 per cent after its fourth-quarter smartphone chip sales outlook did not meet Wall Street expectations, Reuters reported.
Investors expressed concern that Democratic victories could lead to increased regulation of the AI industry. There is growing public opposition in key states regarding the electricity consumption and land requirements of data centres.
The market reversal followed a rally on Wednesday, when the Dow surged more than 1,500 points after Democrats secured majorities in both chambers of Congress and won key gubernatorial races.
