US close: Nasdaq sinks to seven-month low amid tech sell-off

5th Nov 2026 21:15

(Sharecast News) - US equity markets suffered steep losses on Thursday as traders reassessed Democrats' sweeping victory in the mid-term elections, prompting a significant sell-off in AI, chip, and crypto stocks and sending the broader market into free fall.

Heightened concerns that the shift in political power in Washington - with the Democratic Party winning both the House and the Senate - could lead to greater scrutiny of AI infrastructure spending and data centre development weighed heavily on sentiment across the tech sector.

As the initial post-election rally quickly faded, the tech-heavy Nasdaq sank 5.5% by the close to finish at its lowest level since mid-April. The Dow and S&P 500, meanwhile, dropped 3.4% and 4.4%, respectively.

"After initially seeming to shrug off concerns about what a Democrat blue wave in the mid-term elections might mean for the AI trade, panic set in on Thursday," said AJ Bell head of financial analysis Danni Hewson.

"The Nasdaq lost more than $1.8trn-worth of value in intraday trading to enter correction territory, down at least 10% from the most recent highs attained in early October. Investors are fearful of a regulatory backlash against the AI sector from newly elected Democratic lawmakers."

Qualcomm was among the worst performers, dropping nearly 10% after the semiconductor group reported an 8% fall in fourth-quarter revenues on the back of lower smartphone chip sales. Revenues came in at $10.32bn, though still ahead of the $10.12bn consensus forecast, but handset sales tanked 26% year-on-year. Others in the chip sector were also in the red, including Nvidia, Broadcom, Micron Technology and AMD.

AI and data centre companies were taking a tumble, including CoreWeave, nVent Electric, Corning, Comfort Systems and Lumentum.

Meanwhile, reduced risk appetite and fears of tighter oversight in the crypto sector sent stocks lower, with Coinbase, Circle Internet Group, Robinhood Markets and MARA Holdings all falling at least 10%. Bitcoin prices also dropped as hopes over proposed sector deregulation - led by the Trump administration - quickly faded.

Banking stocks were also firmly lower, including Goldman Sachs, Bank of America and JPMorgan Chase & Co.

Economic data took a back seat on Thursday. In the labour market, the Challenger, Gray & Christmas report showed US employers announced 43,994 job cuts in October, up 2% from September's 43,281 but down 71% from the same month a year earlier. October's reading was the lowest for the month since 2023 and marked the eighth time this year that planned layoffs came in below levels seen a year earlier.

Meanwhile, US jobless claims fell 6,000 to 189,000 last week, under the 196,000 consensus forecast, matching a 57-year low recorded in July.