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U.S. stocks reversed Wednesday’s post-election rally on Thursday, led by a sharp sell-off in technology, AI and semiconductor shares. The Dow fell 2.2%, the S&P 500 lost 3.3% and the Nasdaq dropped 5% in the latest Yahoo Finance update; the Nasdaq was approaching correction territory. Oil rose, while the reasons for the abrupt reversal and the market’s next direction remained uncertain.
U.S. stocks plunged Thursday, giving back the gains from the previous day’s post-election rally as investors sold technology, AI and semiconductor shares. In its 5:37 p.m. GMT+1 update, Yahoo Finance reported the Dow down 2.2%, the S&P 500 down 3.3% and the Nasdaq down 5%; the Nasdaq was on track to close in correction territory.
The sell-off followed a sharp turn in trading. U.S. stocks opened mixed Thursday: the Dow initially rose 0.6%, while the S&P 500 edged down 0.3% and the Nasdaq fell 1%, Yahoo Finance reported. Technology shares then weakened further. An earlier update put the Nasdaq down roughly 4%, the S&P 500 down 2.3% and the Dow off more than 700 points. The later session figures showed deeper losses.
Semiconductor shares led the decline. The PHLX Semiconductor Index fell 11% in Yahoo Finance’s latest account. Earlier in the session, Nvidia was down more than 6%, Micron more than 12% and AMD more than 13%. The report said chip stocks had shed about $2 trillion in market value; that figure describes the reported session sell-off, not a permanent loss.
Market volatility also rose sharply. The CBOE Volatility Index, commonly called Wall Street’s fear gauge, surged more than 65% to as high as 27.45, according to the report, which cited Futurum Equities chief market strategist Shay Boloor. Oil moved higher as traders weighed uncertainty over whether President Donald Trump would pursue a deal with Iran to end the Middle East war. Brent traded around $97 a barrel and U.S. benchmark WTI around $90.
Tech Losses Reversed Wednesday’s Rally
The reversal matters because it wiped out the market gains made after Tuesday’s midterm elections and showed that the election result had not settled how investors would price policy and economic risks. Technology and chip stocks drove the day’s declines, pulling the major indexes lower and raising the prospect of a Nasdaq correction close.
Investors were also weighing possible implications of the Democrats’ gains in Congress for AI infrastructure spending and regulation, as well as for the cryptocurrency industry. Those policy effects were not established by Thursday’s market moves. The session instead reflected investors adjusting to uncertainty while reassessing companies and sectors they see as more or less exposed to political change.
Rising oil prices added another source of concern. If sustained, higher crude prices could affect fuel costs and inflation expectations, but one session’s increase does not establish a lasting trend. The jump in the volatility index likewise signaled greater market unease, not a prediction of how prices will move next.
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Election Rally Met Fresh Sector Pressure
U.S. shares rallied Wednesday after Democrats swept both chambers of Congress in Tuesday’s midterm elections, according to Yahoo Finance’s report. That advance reflected relief among some investors that election uncertainty had passed, but markets continued to debate what a change in control of Capitol Hill could mean for policy and company prospects.
Thursday’s drop followed that broad rally rather than a single confirmed announcement about the economy or a specific policy change. The report attributed pressure in chip and data-center stocks to renewed investor concern about AI, while noting that Qualcomm also fell after its quarterly results. Stock-specific gains continued: AppLovin rose in premarket trading after it reported better-than-expected third-quarter revenue and earnings and issued a stronger-than-expected fourth-quarter forecast. Its performance did not prevent losses across the wider technology sector.
Economic data offered a separate point of focus. Challenger, Gray & Christmas reported that planned layoffs in October fell to their lowest level since 2023, as companies turned toward retaining employees. The report described that data as setting the scene for Friday’s employment report; it did not provide details of the upcoming report’s figures.
Market Drivers Remain Under Debate
The source report did not identify one confirmed catalyst that fully explains the reversal. It described investors as responding to AI concerns, chip-stock weakness and uncertainty over the political and economic implications of the election. The precise weight of each factor in Thursday’s decline is not established.
It was also not yet clear whether the Nasdaq would finish the session in correction territory: Yahoo Finance said it was on track to do so, which is a projection rather than a confirmed closing result. The report did not provide final closing prices for the indexes. Nor did it establish whether higher oil prices would persist or whether any proposed U.S.-Iran agreement would change the market outlook.
Friday’s Jobs Report Comes Next
Investors were due to turn to Friday’s employment report for a fresh read on the U.S. labor market. The October layoff-planning figures from Challenger, Gray & Christmas pointed to fewer announced plans than in prior periods, but do not by themselves determine what the government’s jobs data will show.
Markets will also continue to assess earnings, AI-related investment and the political implications of the election. The next confirmed measures to watch are the indexes’ closing levels and whether volatility, chip shares and crude oil extend Thursday’s moves. The report offered no confirmed forecast for those developments.
Key Questions
How much did the major U.S. indexes fall?
In Yahoo Finance’s 5:37 p.m. GMT+1 update, the Dow was down 2.2%, the S&P 500 down 3.3% and the Nasdaq down 5%. The figures were reported during Thursday’s session; final closing levels were not included in the source material.
What drove Thursday’s sell-off?
The report linked the decline to heavy selling in AI, technology and semiconductor shares, alongside investor uncertainty following the election. It did not establish a single cause or quantify how much each factor contributed.
Why were chip stocks under particular pressure?
Yahoo Finance reported broad weakness in chip and data-center shares as investors reassessed AI-related concerns and the possible effects of election results on spending and regulation. The PHLX Semiconductor Index fell 11% in the report’s latest update.
Did the Nasdaq close in correction territory?
The report said the Nasdaq was on track to close in a correction, but did not provide the final closing level. That status cannot be confirmed from the supplied report alone.
What market news was expected next?
Investors were awaiting Friday’s employment report. The source also identified ongoing attention to company earnings, oil prices and how markets assess the election’s policy implications.
Source: finance.yahoo.com
