Stocks crater as investors recoil from tech companies
Tech-heavy Nasdaq plunges nearly 1,300 points as Wall Street weighs the impact of Democratic wins on the AI sector.
On Thursday, the stock market experienced a significant decline, with investors reacting to potential changes in congressional control following the U.S. midterm elections. This shift in power raised concerns that could slow the construction of data centers essential for artificial intelligence services. The tech sector, particularly companies involved in AI, faced the brunt of the market turbulence.
The tech-heavy Nasdaq Composite Index plummeted 1,285 points, or 5%, during early-afternoon trading, indicating investor reaction to growing headline risks surrounding AI. Market observers anticipate that the Democrats' strong electoral performance could provide a boost to opponents of data centers, potentially slowing down their development.
The broader S&P 500 and Dow Jones Industrial Average also suffered, dropping 287 points (3.7%) and 1,542 points (2.9%), respectively. Chip and AI-exposed stocks were particularly hard-hit. Nvidia shares dropped 7.5% and led the S&P 500's decline, having already fallen 3.2% the previous day. Advanced Micro Devices saw a substantial 14.6% decline.
CoreWeave, a cloud-based AI chip rental company, experienced a 12.1% drop. Despite the initial impact on financial markets, the reaction to the election results waned slightly. Brent crude oil prices rose 2.6% to $97.11, recovering some of the 9% drop from the previous day. However, uncertainty remains about the ongoing conflict in Iran and the global energy industry's recovery timeline.
Written by urgent.news from CBS News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
