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U.S. stocks reversed Wednesday’s post-midterm rally on Thursday as technology and semiconductor shares sold off. The Dow fell 2.2%, the S&P 500 dropped 3.3% and the Nasdaq lost 5% in the late-session figures reported by Yahoo Finance; the Nasdaq was approaching correction territory. Investors were weighing uncertainty around AI infrastructure, the new political landscape and higher oil prices.
U.S. stocks fell sharply Thursday, reversing the previous session’s post-midterm rally as investors sold technology and semiconductor shares. The Dow Jones Industrial Average dropped 2.2%, the S&P 500 fell 3.3% and the Nasdaq Composite slid 5%, according to Yahoo Finance’s report, with the Nasdaq nearing a correction after briefly erasing Wednesday’s gains.
The sell-off was concentrated in chips and other technology stocks. The PHLX Semiconductor Index fell 11%, while Nvidia, Micron, Broadcom and AMD were among the companies cited as major decliners. Yahoo Finance reported that the Nasdaq had erased its post-election advance within six minutes of trading, before losses deepened. The report said the S&P 500 had shed more than $2 trillion in market value by midmorning; that figure describes the reported intraday move, not a final closing total.
The reversal followed Wednesday’s rally, when investors responded to Democrats winning control of both chambers of Congress. Yahoo Finance said falling oil prices and lower Treasury yields had helped support that advance. By Thursday, investors were reassessing what the change in political control could mean for technology policy and the data centers underpinning AI expansion. The report did not establish that any specific policy change had caused the sell-off.
Other markets also moved lower. The CBOE Volatility Index rose more than 65%, reaching as high as 27.45, which Yahoo Finance described as its largest one-day increase in more than two years. Bitcoin briefly fell below $76,000 before moving back above that level, while oil rose: Brent traded around $97 a barrel and U.S. benchmark West Texas Intermediate near $90, according to the report.
Tech Sell-Off Reverses Rally
The reversal shows how quickly a market rally tied to an election outcome can give way when investors confront questions about what follows. For households with retirement accounts and investors exposed to technology stocks, the sharp decline illustrates the short-term volatility surrounding sectors that have driven much of the market’s recent attention.
The chip index’s 11% drop puts the focus on the companies supplying processors and equipment for AI computing. If concerns about regulation or the pace of data-center investment continue, those expectations could weigh on shares across the sector. Thursday’s trading alone, however, does not establish a lasting change in demand or policy. The moves in oil and volatility also suggest investors were responding to more than one source of uncertainty.
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From Election Rally to Reversal
The sharp decline came one session after a strong market response to the midterm results. Yahoo Finance reported that the Dow had risen 3% on Wednesday, its best post-midterm-election day since 1982, as investors welcomed the election outcome and lower oil prices and Treasury yields. Thursday’s losses erased those advances across major indexes.
The report linked some investor concerns to the effect a Democratic-controlled Congress could have on AI-related development and data-center construction. It also noted that Texas, where SpaceX and Tesla are headquartered, changed political direction in the election, prompting questions about the companies’ regulatory and merger prospects. Those concerns were reported as investor worries, not as confirmation that a merger had been blocked or that new restrictions had been adopted.
Oil rose amid uncertainty over whether President Donald Trump would pursue a deal with Iran to end the war in the Middle East. Vice President JD Vance wrote on X, “The reason we lost [the midterm elections] is the war,” in a post suggesting the party should push for a resolution. The statement was part of the political discussion reported that day; it did not confirm a change in U.S. policy.
Policy and Closing Levels Unclear
The report captured trading during the session and gave an update time of 6:13 p.m. GMT+1; it does not provide final closing figures for each index. The Nasdaq was described as being on track to close in correction territory, which is a market threshold rather than confirmation that it had closed there.
It also remains unclear whether the election will lead to specific changes affecting AI data centers, semiconductor companies, or the SpaceX and Tesla merger prospects discussed by analysts. No policy decision or completed transaction was reported. The reasons for Thursday’s market moves cannot be reduced to one factor: the source described a combination of chip selling, election-related reassessment and uncertainty over oil and geopolitics.
Investors Await Jobs and Results
Investors were looking ahead to Friday’s employment report for further information about the U.S. labor market. Yahoo Finance also cited a Challenger, Gray & Christmas report showing planned layoffs in October had fallen to their lowest level since 2023, as companies turned toward retaining existing employees. That measure of announced layoff plans is not the same as a full count of job losses, and the government employment report could provide a different set of indicators.
Corporate earnings were also on the calendar, including results from Duke Energy, Airbnb and Lumentum. Market participants will continue to watch whether technology and chip shares stabilize, how oil prices respond to developments involving Iran, and whether lawmakers or officials offer concrete details on policy. The source report did not specify a policy timetable or predict when the sell-off might end.
Key Questions
How much did the major U.S. stock indexes fall?
Yahoo Finance reported the Dow down 2.2%, the S&P 500 down 3.3% and the Nasdaq down 5% during Thursday’s trading. The report was updated before final closing figures were supplied.
What drove the Thursday sell-off?
The report pointed to heavy selling in AI and semiconductor shares and investors’ reassessment of the election’s possible implications for technology and data-center investment. It also cited higher oil prices and broader uncertainty. It did not establish a single cause.
Did the Nasdaq officially enter a correction?
The report said the Nasdaq was on track to close in correction territory, but it did not provide a final closing level confirming that threshold had been reached.
What economic data was due next?
A U.S. employment report was scheduled for Friday. Yahoo Finance also listed earnings from companies including Duke Energy, Airbnb and Lumentum.
Source: finance.yahoo.com
