Nasdaq posts biggest daily drop in 19 months on fears of AI regulations
Chipmakers also sank on fears of tougher AI regulation after Democrats won control of the US Congress.
On November 5, the Nasdaq Composite suffered its largest single-day decline in 19 months, echoing a correction that began on October 6, according to market data. The drop came amid concerns that Democrats' recent win in the US Congress could lead to tighter regulations, slowing down the AI infrastructure development that has fueled tech stocks to record highs this year.
Chipmakers, particularly Nvidia, took the brunt of the selloff, with its shares down over 9%, and the Philadelphia Semiconductor index falling over 12%. The Nasdaq's loss of $3 trillion in market value from S&P 500 companies also fueled the decline. While the selloff seems unlikely to halt the AI growth story, investors are wary of any slowdown.
Other major tech companies, including Meta Platforms, Amazon.com, and Alphabet, also experienced declines following their November 4 rally. The broader market, with the S&P 500 and Dow Jones Industrial Average, also fell in response, though they have shown resilience, up 7.4% and 3.44% respectively, in 2026. Heavy trading volume, nearing 27 billion shares, underscored the market's volatility.
Fed officials hinted at potential future rate hikes, focusing on the upcoming US nonfarm payrolls data on November 6.
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- Nasdaq posts biggest daily drop in 19 months on fears of AI regulations freemalaysiatoday.com
- US stocks: Nasdaq posts biggest daily drop in 19 months on fears of AI regulations businesstimes.com.sg
