By Salma El-Sakka
Major stock markets suffered severe declines Thursday as investors sold off artificial intelligence-related shares and broader equities, marking the worst single-day drop for tech-heavy indexes in 18 months.
US Markets Plunge
The S&P 500 fell 4.36 percent, while the Nasdaq 100 dropped more than 5.5 percent, its worst day since April 2025 tariff announcements. Nvidia shares slid just over 9 percent, Tesla fell 10.8 percent, and SpaceX dropped 9 percent. Chipmakers Micron and AMD plunged nearly 17.5 percent and 17.2 percent respectively. Intel extended losses, falling another 10 percent after a nearly 30 percent drop last week, leaving its stock more than halved in a month. Some recovery appeared in pre-market trading Friday, with several US stocks rising about 4 percent as investors bought at lower prices, though further volatility remains possible.
European and Asian Markets Follow
The sell-off spread to Europe, dragging down Germany's DAX and the Dutch AEX, with BE Semiconductor and ASML hit hard. Overnight, Japan's Nikkei 225 and South Korea's Kospi, which includes SK Hynix and Samsung, both closed about 6 percent lower.
Midterm Elections Trigger Sell-Off
Analysts at Goldman Sachs said asset managers had sold stocks ahead of the US midterm elections but bought back after unexpected results, driving prices up rapidly. That prompted hedge funds to cut exposure or lock in profits, leading to a near-indiscriminate sell-off. Concerns rose that a Democratic-led Congress may be less supportive of data-center expansion and could impose tighter regulation on AI infrastructure.
Regulatory Concerns Weigh
Goldman Sachs noted that selling pressure may persist, with stocks trading below fundamental valuations, but rebounds could be violent once pressure eases. AJ Bell's Danni Hewson said chip stocks took heavy damage as investors weighed potential demand impact from a backlash against data centers and AI infrastructure.
Bitcoin and Memecoin Tumble
Bitcoin fell sharply amid reduced expectations for crypto deregulation under a weakened Trump administration. President Trump's memecoin hit a record low below $1.12 before recovering slightly to $1.21, down about 99 percent since early 2025.
Oil Price Drop Offers Some Relief
Lower oil prices provided a brighter outlook, with Brent crude down as much as 20 percent this week on bets that a weakened President Trump may be less likely to escalate conflict with Iran. Cheaper energy could ease inflation, shift interest-rate expectations, and benefit rate-sensitive sectors such as housing, REITs, and utilities.
