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AI sell-off wipes trillions off world stocks; Nasdaq enters correction, then Wall Street rebounds on Friday
Reuters said the chip index had its biggest one-day fall since April 2025 and Nvidia its worst day since January 2025; investors cited fears of tighter AI rules after the US elections and the cost of data centres.
A sell-off in artificial intelligence and chip stocks hit world markets on Thursday, then eased on Friday as US shares bounced back partly, Reuters reported. The Philadelphia Semiconductor Index had its biggest one-day drop since April 2025 and Nvidia its worst day since January 2025, Reuters said.
Thursday: the fall
Trillions of dollars were wiped off world share values, Reuters reported. ETV Bharat gave Wall Street's falls as 3.4% for the Dow Jones, 4.36% for the S&P 500 and 5.52% for the Nasdaq, which put the S&P 500 and the Nasdaq into "correction" territory. A correction is usually defined as a fall of 10% or more from a recent high.
In Asia, Japan's Nikkei fell 5.96% and South Korea's Kospi 6.02%, ETV Bharat said. Europe's STOXX 600 lost about 1% on Friday, Reuters reported.
Friday: a relief rally
On Friday the Dow was down 0.08%, the S&P 500 rose 0.71% and the Nasdaq gained 1.4%, but all three were still on course for weekly losses, Reuters said. The chip index rose 4.2%, Nvidia 3%, and AMD, Intel and Micron between 5.5% and 10%.
Why investors said it happened
Reuters cited two main worries:
- Fear of tighter AI regulation after the Democratic wins in the US elections. Texas governor-elect Gina Hinojosa said the state would pass laws to protect communities from further data-centre buildup, Reuters reported.
- Doubts over returns on data centres and other AI infrastructure, which the report said triggered margin calls and unsettled retail investors and hedge funds.
Gerry Sparrow of Sparrow Capital Management attributed the jitters to "the uncertainty of the change in government," not to an expected collapse in the AI buildout, Reuters reported.
Other numbers on Friday
US nonfarm payrolls rose by 165,000, beating forecasts, and annual wage growth was 3.1%, Reuters said. The 10-year Treasury yield ticked up to 4.85%. Brent crude was back near $100 a barrel but still headed for its biggest weekly fall since 2020, as traders hoped the midterm results might push President Trump to de-escalate the Iran war.
What it meant for India
India's Sensex and Nifty rose more than 2% on Friday despite the global sell-off; see BDT's market report.
This is a market report, not investment advice.
How we verified this
VerifiedThursday’s percentage falls (Dow 3.4%, S&P 500 4.36%, Nasdaq 5.52%, Nikkei 5.96%, Kospi 6.02%) are from ETV Bharat; Friday’s moves, the “worst day since” comparisons, the causes and the analyst quote are from Reuters as published by BNN Bloomberg. Search summaries of CNBC, CBC and Yahoo Finance reported matching figures (S&P 500 down about 4.4%, Nasdaq in correction), but BDT could not open those pages and does not rely on them. Reasons for the sell-off are the explanations cited by Reuters, not established causes. The “Democrats’ wins” explanation is a market fear reported by Reuters; BDT has not seen any policy proposal.
