The Nasdaq Composite Just Shattered Its Single-Session Point-Loss Record: 3 Reasons These Elevator-Down Moves May Be Just Beginning

On November 5, the Nasdaq Composite suffered a massive 1,422-point drop, shattering its previous single-session loss record of 1,122 points. The Dow Jones Industrial Average fell 1,833 points and the S&P 500 dropped 335 points, marking a tough day for Wall Street's major indexes.

While the Nasdaq's decline didn't reach the top 20 largest percentage drops, the sheer magnitude of the 1,422-point loss was unprecedented. There are three potential reasons for these continuing "elevator-down" moves, which may only be the beginning.

Firstly, after the election, President Trump will be working with a Democrat-led Congress. Despite initial market rallies, Trump has repeatedly stated his intention to veto stricter AI regulation bills from a Democrat-controlled Congress, which could lead to further AI regulation at the state level and negatively impact AI hardware companies.

Secondly, the bond market has warned that the AI infrastructure build-out may be in trouble. As public companies issue debt at a record pace to fund AI infrastructure, the growing debt burden combined with uncertainty over AI revenues is driving up investors' demand for higher compensation to take on credit risk. This is evident in the soaring bond prices for companies like Oracle, SpaceX, and CoreWeave, all at record highs.