Nasdaq plummets toward correction territory
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Tech stocks plunged Thursday in the most visible sign yet that investors are growing worried about a slowdown in the AI boom.
The latest: The tech-heavy Nasdaq Composite index fell more than 5% in late morning trading, pushing it closer to correction territory before recovering a bit by midday. A correction is defined as a decline of at least 10% from a recent high.
- The sell-off could become the stock market's worst showing since the April 2025 tariff panic.
The big picture: The sell-off comes after Democrats notched historic gains in midterm elections, including taking the governorships of Texas and Ohio — areas of intense data center development.
- In Texas, Gov.-elect Gina Hinojosa promised to impose a moratorium on new buildouts until lawmakers enact stronger protections.
- In Ohio, Amy Acton called for conditional pauses requiring developers to cover their utility costs, provide community benefits and use union labor.
Between the lines: Their victories signal growing political resistance to arguably the largest investment boom in U.S. history.
Zoom in: AI-related shares led the sell-off, with companies closely tied to the data center build-out posting double-digit losses.
- Semiconductor shares tumbled. The Philadelphia Semiconductor Index was down more than 9% at midday, extending a steep decline.
- So-called neoclouds — companies that build data centers in order to lease out their computing power to larger players like hyperscalers — were particularly hard hit.
- Even the Big Tech hyperscalers — Microsoft, Alphabet and Amazon — which supported the indexes with gains on Wednesday, were caught in Thursday's market downdraft.
The broader market slumped as well, hurt also by a rise in oil prices.
- The benchmark S&P 500 index was down more than 3.41% at midday.
- The market index that looms largest in the popular imagination, the Dow Jones Industrial Average, was down by more than 1,300 points, or 2.6%.
Editor's note: This story has been updated with additional details.
This is a developing story. Check back here for updates.
