Key Notes
- The Nasdaq 100 fell 6.36% and the S&P 500 lost 4.36%, more than erasing Wednesday’s gains as AI infrastructure stocks led a broad market reversal.
- The VIX was quoted at 28.09 after the equity close, up about 69% from Wednesday, while its intraday peak represented a rise of more than 70%.
- The Nasdaq 100 finished 14.7% below its record closing high and would need another 6.2% decline to reach the conventional bear-market threshold.
American stocks suffered their steepest selloff in more than a year Thursday, with the S&P 500 dropping 4.36% and the Nasdaq 100 plunging 6.36% as the retreat from artificial-intelligence stocks spread across Wall Street. The Dow Jones Industrial Average lost more than 1,800 points, erasing the previous day’s post-election rally.
The Cboe Volatility Index, widely known as Wall Street’s fear gauge, jumped nearly 70% from Wednesday’s close. Investors who had initially welcomed the midterm election outcome turned their attention to the threat that tighter limits on data-center construction could slow one of the stock market’s biggest growth engines.
The decline deepened sharply after our morning report, when the Nasdaq 100 was already down more than 4%. By the close, the technology-heavy benchmark was almost 15% below its October record closing high.
The Closing Numbers Show a Broad Reversal
Thursday’s November 5 closing levels were:
- Nasdaq 100: down 6.36% to 26,629.81.
- Nasdaq Composite: down 5.52% to 24,315.00.
- S&P 500: down 4.36% to 7,353.73.
- Dow Jones Industrial Average: down 1,833.06 points, or 3.44%, to 51,523.06.
The S&P 500 posted its worst daily decline since April 4, 2025, based on historical prices. Thursday’s losses more than wiped out Wednesday’s gains, when the Dow had risen about 1,570 points and the S&P 500 had advanced 1.58%.
The Nasdaq 100 finished 14.7% below its October 6 record close of 31,224.47. The conventional bear-market threshold, a 20% decline from that peak, would put the index near 24,979.58. Reaching it would require another 6.2% fall from Thursday’s close.
That leaves a gap of about 5.3 percentage points in the drawdown, rather than a further price decline of only 5%. The broader Nasdaq Composite was already in correction territory, ending 11.9% below its own October 6 record close. The two Nasdaq indexes track different groups of companies and have suffered different declines from their peaks.
Wall Street’s Fear Gauge Jumps Nearly 70%
A VIX quote at 4:09 p.m. Eastern time put the index at 28.09, up 69.1% from Wednesday’s 16.61 close. Its session high of 28.36 represented a rise of about 70.7%, according to market data.
The jump was exceptional, though a comparison with the pandemic requires both the percentage change and the starting level. Cboe’s daily history records a 74.0% increase on December 18, 2024. During March 2020, its biggest one-day percentage rise was about 43.0% on March 16, when the index closed at 82.69.
Thursday’s roughly 69% rise therefore exceeded the largest daily percentage jump that month, while leaving the VIX far below the levels reached during the pandemic panic. It also followed Wednesday’s 20.3% fall, which had pulled the index down to a comparatively low starting point.
The VIX measures expected near-term swings in the S&P 500 through option prices. Its surge reflects a repricing of uncertainty around equities, rather than a forecast that share prices will fall by a particular amount.
AI Shares Bear the Brunt of the Selling
Losses were particularly severe among the companies supplying the AI infrastructure buildout. Nvidia (Nasdaq: NVDA) fell 9.3% to $181.60, Advanced Micro Devices (Nasdaq: AMD) dropped 17.3% to $404.40, and SanDisk (Nasdaq: SNDK) sank 22.3% to $806.43.
Cloud providers also retreated. Nebius (Nasdaq: NBIS) lost 14.9%, while CoreWeave (Nasdaq: CRWV) fell 9.8%. The selling reached Tesla (Nasdaq: TSLA), down 10.8%, and SpaceX (Nasdaq: SPCX), down 9.0%.
Investors were reassessing the pace of data-center expansion after Democrats won both chambers of Congress and important governors’ races. Local restrictions and the prospect of additional moratoriums had already weighed on suppliers in Wednesday’s chip-stock decline. The concern is that delayed facilities would push back purchases of processors, memory, storage and other equipment.
That risk reaches beyond American suppliers. South Korea’s Kospi had fallen about 5.3% earlier Thursday, with memory-chip companies among the hardest hit in the Asian selloff. By Wall Street’s close, the pressure had become much broader than the isolated technology losses seen during Wednesday’s rally.
Friday’s Jobs Report Is the Next Test
There were still sharp stock-specific gains: AppLovin (Nasdaq: APP) rose 31.0%. Its rally offered little cushion against losses in the much larger companies that dominate the major indexes.
Treasury prices rose as equities fell. The benchmark 10-year yield slipped by about six basis points to roughly 4.84%, based on yield data.
Friday brings the next major economic release: the Bureau of Labor Statistics will publish October’s employment report at 8:30 a.m. Eastern time. The hiring and wage figures will give investors a fresh basis for assessing the Federal Reserve’s rate outlook after a session dominated by fears about the future of AI investment.
