Wall Street slumps as sharp tech losses put Nasdaq on course for correction

The US stock market experienced a sharp decline on Thursday, with the Nasdaq Composite poised to enter correction territory. The Dow Jones Industrial Average fell 0.66% to 53,004.25, while the S&P 500 lost 1.66% to 7,560.88. The Nasdaq Composite suffered the most significant drop, down 3.09% to 24,941.44. Chip and data center-related stocks were the primary drivers of the market's downward trend, following a day of strong gains spurred by Democrats' sweeping midterm election victory.

Qualcomm's stock plummeted 9% after missing Wall Street estimates for fourth-quarter smartphone chip sales, while Nvidia, Advanced Micro Devices, Intel, and Marvell Technology also suffered heavy losses. Additionally, data center operators IREN, Hut 8, and Applied Digital saw their stocks drop between 6% and 11%. The decline in tech stocks followed the Democrats' election victory, which raised concerns about a potential slowdown in AI industry expansion.

Analysts suggest that a divided government in Washington could lead to fewer sharp legislative changes, potentially impacting fiscal spending. The US stock market had previously seen a significant gain on Wednesday, driven by easing political uncertainty and falling oil prices.