The Nasdaq 100 drops 6%, losing a record $2.3T in value, and the Philadelphia chip index plunges 12%, on concerns over the AI trade after Democrats won Congress (Natalia Kniazhevich/Bloomberg)

Technology and semiconductor stocks led a sharp decline in US stocks on Thursday, following a rally the previous day after Democrats won the US midterm elections. The Nasdaq 100 dropped 6%, losing a record $2.3 trillion in value, while the Philadelphia chip index plunged 12%. According to Techmeme, technology stocks experienced their largest plunge since 2020 as investors exited the sector due to concerns over the artificial intelligence trade.

The downturn was driven by investor worries regarding AI-linked stocks, including potential regulatory pressures and renewed moratoriums on AI data center projects following the Democratic victory in both houses of Congress, according to FXStreet. Quartz noted that investors also weighed a possible slowdown in data center construction. Hindustan Times - World News reported that the Nasdaq Composite was on track to enter correction territory, with the S&P 500 and Dow Jones Industrial Average also recording sharp falls.

Within the semiconductor sector, the wider index fell 7.1% as major chipmakers including Nvidia, Advanced Micro Devices (AMD), Intel, and Marvell Technology contributed to the decline, Hindustan Times - World News reported. Additionally, Qualcomm shares plunged 9% after its fourth-quarter forecast for smartphone chip sales missed estimates due to weak demand and declining revenue from its business linked to Apple.

Brief written by urgent.news from Techmeme, Quartz, Hindustan Times - World News, FXStreet — 4 reports on this story. Machine-written — may contain errors; check the original before relying on it.