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The Nasdaq composite fell more than 5.5 percent on November 5 2026 erasing an estimated 2.5 trillion dollars in market capitalization as semiconductor shares and AI-related companies led a broad sell-off across Wall Street according to CNN Business. The decline marked the index’s worst single-day performance since April 2025 when global tariffs triggered similar volatility a report from the network showed. Broader indexes followed with the S&P 500 dropping around 4 percent and the Dow Jones Industrial Average losing more than 2.9 percent in their weakest sessions since that same period last year.
Nvidia shares slid more than 9 percent knocking over 400 billion dollars from the company’s valuation while AMD and Micron each fell more than 17 percent a compilation of market data by Yahoo Finance indicated. The Philadelphia Semiconductor Index which tracks 30 leading chip producers declined more than 12 percent on the day extending losses that have now wiped out a quarter of its value in the past month according to Bloomberg figures. Shares in Elon Musk’s SpaceX dropped nearly 9 percent and Tesla fell about 11 percent together erasing more than 300 billion dollars in combined market value as the rout spread to firms with heavy AI exposure.
A short-lived post-election rally on the previous day that produced the Dow’s best midterm performance in 44 years gave way to the sell-off as Democratic victories in Congress and key states crystallized according to a Morningstar assessment. UBS analysts estimated that roughly 30 percent of planned data center capacity additions for 2028 could face delays or cancellations due to potential construction pauses a projection cited in Reuters reporting. Around 39 of 45 ballot measures restricting data centers passed in various states heightening concerns over power usage water consumption and local infrastructure strain Al Jazeera reported.
Morningstar chief US market strategist David Sekera said panicked investors are selling first and will ask questions later as fears mount that newly elected Democratic governors will implement restrictions impeding future growth. eToro market analyst Jakub Rochlitz stated that as investors price in a possible slowdown of the AI buildout due to Democratic opposition to rapid data center expansion the market is repricing growth expectations across the board. The tech sector which recently comprised about 40 percent of the S&P 500’s total value now confronts questions about returns on the massive capital outlays required for AI infrastructure a Boston Globe review found.
The AI trade had powered US equities for four years prior to the current reversal with the Nasdaq 100 entering correction territory after falling more than 10 percent from its October record according to Bloomberg tracking. Disappointing reactions to earnings from several chip firms compounded the post-election jitters a Reuters dispatch reported. SpaceX had already lost more than 500 billion dollars in market value over the preceding month from its summer peak as enthusiasm for its AI and satellite ambitions cooled a Motley Fool analysis showed.
