Nasdaq faces correction as AI stocks slump amid fears of stricter regulations following Democrats’ midterm election win
The Nasdaq Composite was expected to confirm a correction as AI stocks dropped due to concerns over stricter AI regulation following the Democrats’ midterm win.
Nvidia Nvidia fell 7.7%, while the Philadelphia Semiconductor index plummeted nearly 10%.
The sell-off followed Democratic election victories raising fears of slowed AI data-center growth, a key driver of recent stock market highs.
Technical correction is anticipated for the Nasdaq Composite, reflecting a 10% drop from October peaks.
Affecting tech
Big tech including Meta, Amazon, and Alphabet saw declines of 3.8%, 1.7%, and 1%, respectively.
Data center operators and AI-exposed companies like GE Vernova and Constellation Energy suffered steep losses.
Tesla and SpaceX extended losses, while Qualcomm fell 11.5% after missing smartphone chip sales estimates.
Major indices, including the Dow Jones and S&P 500, also experienced significant dips.
Every S&P 500 sector turned negative, especially tech and consumer discretionary stocks.
Recent stock market gains followed reduced political uncertainty boosting investment appetite.
A divided U.S. government might mean fewer legislative changes and fiscal spending constraints.
Central banks acknowledge high inflation, with remarks hinting at future rate hikes.
Upcoming U.S. employment data will be crucial as markets prepare for potential Fed rate increases.
Declining stocks outpaced advancing ones on both NYSE and Nasdaq.
The S&P 500 and Nasdaq registered various highs and lows amid ongoing volatility.
