Nasdaq Drops 5% as Chip Stocks Selloff Begins

Nasdaq Enters Correction

The Nasdaq Composite dropped about 5% on Thursday, November 5, confirming a correction after falling more than 10% below the record closing high it set on October 29.

Key Indices Fall

The Nasdaq 100 fell 6.24%, the S&P 500 lost 3.3%, and an exchange-traded fund tracking U.S.-listed semiconductor stocks sank more than 12%.

Chip Stocks Rally Then Selloff

Less than 24 hours earlier, those same stocks were rallying with the Nasdaq gaining 1.44% and the Dow jumping 3% to close at 53,356.12.

Texas Data Centers at Risk

Democrats swept races in states that have become the physical backbone of the AI buildout, Texas among them, and traders started pricing in a less friendly political climate for data centers.

Greg Abbott's Warning

Texas alone hosts 335 data centers with another 247 in planning, and the state's governor, Greg Abbott, had told the industry months earlier that data center companies had 'dug their own grave' by failing to…

“data center companies had 'dug their own grave' by failing to win over local communities”

AI Infrastructure Stocks Drop

SpaceX shares fell 6% and Oracle dropped 4% after Democrat Gina Hinojosa won the Texas governorship on a data-center moratorium platform.

Market Reaction to Political Shift

The Democratic wins handed the market a reason to question whether AI capital spending can keep expanding at the same political cost, and investors chose to sell first and ask later.