Nasdaq falls more than 10% from record, nearing correction
The Nasdaq Composite fell nearly 4% to 24,712.60 on Thursday, moving more than 10% below its record closing high and putting the technology-heavy index on
The Nasdaq Composite fell nearly 4% to 24,712.60 on Thursday, moving more than 10% below its record closing high and putting the technology-heavy index on course to confirm a correction. Investors were rattled by doubts over whether political scrutiny could slow the vast data-center expansion underpinning the AI boom.
The index’s record close was 27,599.89 on Oct. 6. A drop of at least 10% from a recent peak is widely watched as the threshold for a market correction, but the available figures show the Nasdaq nearing that status rather than confirming it.
AI infrastructure fears hit chip stocks
The selloff wiped out the Nasdaq’s gains from the previous session, when stocks had risen after Democrats won both houses of Congress in the midterm elections. Investors then began weighing whether the change in control could bring greater scrutiny to further AI infrastructure investment.
Concerns center on data centers that require billions of dollars to build. Investors fear projects could be delayed, disrupting the spending plans that have helped lift technology stocks. Semiconductor and “neocloud” companies, which have contributed heavily to recent market gains, fell sharply for a second consecutive session.
The Philadelphia Semiconductor Index dropped 8.4% to its lowest level in more than six months. Nvidia and Broadcom led losses among its largest constituents.
Investors reassess the AI growth story
The pullback reflects a shift in expectations: investors are questioning not only how much technology companies will spend on AI, but also whether political headwinds could slow the construction needed to support it. The Nasdaq 100 was projected to shed $1.8 trillion in market value on Thursday as those concerns spread.
Matthew Tuttle, founder and chief executive of Tuttle Capital Management, said investors were looking for a positive signal from the AI sector. “Wall Street badly needs a happy AI story right now,” he said, adding that divided government could mean little legislation advances over the next two years.
The immediate test for technology stocks is whether concern about data-center delays continues to weigh on chipmakers and other companies tied to AI infrastructure. For now, the Nasdaq’s decline has brought it across the 10% line from its record close, with investors focused on whether the slide will hold.
