Nasdaq sinks 5% as stocks crater, investors recoil from tech companies amid ai risks

Election results unsettle markets

Market watchers said Democrats’ sweeping victories this week could strengthen opposition to data centers. The projects have already prompted widespread public opposition, raising questions about the pace of their rollout. Adam Crisafulli, a Wall Street analyst at Vital Knowledge, said investors were responding to rising “headline” risks around AI.

Technology shares lead losses

The Nasdaq Composite, which is heavily weighted toward technology, fell 1,285 points, or 5%, in early-afternoon trading. The broader S&P 500 lost 287 points, or 3.7%, and the Dow Jones Industrial Average dropped 1,542 points, or 2.9%.

AI-exposed stocks were among the hardest hit. Nvidia fell 7.5%, following a 3.2% decline the previous day, and was the largest drag on the S&P 500. Advanced Micro Devices sank 14.6%, while CoreWeave, which rents customers access to AI chips through the cloud, lost 12.1%.

Oil regains ground

Brent crude rose 2.6% to $97.11 a barrel, recovering much of its nearly 9% fall the day before. The initial market reaction to the election results had eased somewhat in other financial markets.