Wall Street recorded its heaviest losses in more than a year on Thursday, November 5, as investors sold artificial intelligence and semiconductor shares in the days after the Democratic Party won control of both chambers of the US Congress in the midterm elections.
The Dow Jones Industrial Average closed down 1,833 points, or 3.44 percent, at 51,523.06. The S&P 500 fell 4.36 percent and the Nasdaq Composite lost about 5.5 percent, taking the tech-heavy index into correction territory, usually defined as a fall of 10 percent or more from a recent peak. All three indices had their worst day since April 2025, according to closing figures cited by Stocktitan from CNBC.
Chipmakers lead the decline
The Philadelphia Semiconductor Index dropped 12.25 percent, Yahoo Finance reported. Nvidia fell about 9 percent, while Micron and AMD each lost around 17 percent, according to closing data compiled by Stocktitan. Qualcomm fell about 9.5 percent after its phone chip sales missed Wall Street estimates.
The selling spread well beyond chipmakers. Fox Business reported that Meta fell about 4 percent and data centre operators IREN, Applied Digital and Nebius each dropped more than 14 percent. Power and equipment suppliers linked to data centres, including GE Vernova and Constellation Energy, also declined, as did Tesla.
A few companies moved the other way on their own results. AppLovin rose about 31 percent after beating third-quarter profit estimates, according to Stocktitan.
Why investors sold
Reuters reported that investors were weighing the prospect of tougher AI regulation and a slower build-out of data centres once Democrats control Congress. Fox Business noted that rising electricity prices have made data centre growth a political issue in some US states, and that some Democrats have called for restrictions or pauses on new projects.
Melissa Brown of SimCorp told Reuters that newly elected officials are “looking to slow the pace of AI infrastructure development”.
Not every analyst pointed to politics alone. Nomura’s Charlie McElligott said institutional investors were selling the year’s best-performing stocks to lock in gains, and that the main trigger was not a deterioration in company fundamentals, Yahoo Finance reported.
Interest rates were another factor. According to Reuters, Cleveland Fed President Beth Hammack and Richmond Fed President Thomas Barkin hinted at possible future rate rises.
Key figures from Thursday’s session
- Dow Jones: down 1,833 points (3.44%) to 51,523.06
- S&P 500: down 4.36%
- Nasdaq Composite: down about 5.5%, in correction territory
- Nasdaq-100: down 6.36%
- Philadelphia Semiconductor Index: down 12.25%
- Retail investors: net sellers of about $358 million in individual stocks, the most since March 2020, according to Vanda Research
- Volatility: the VIX index jumped more than 65 percent during the session
- Oil: Brent crude traded near $98 a barrel
What it means for investors in the UAE
Thursday’s fall came days after a strong run in local markets, with the Dubai Financial Market’s value returning above Dh1 trillion, as Al Gulf News reported earlier this week.
For UAE-based investors holding US shares or funds that track the Nasdaq and S&P 500, regular trading on Wall Street now opens at 6.30pm and closes at 1am UAE time, following the end of US daylight saving time on November 1.
Kevin Mahn of Hennion & Walsh told Yahoo Finance he expects “more choppiness ahead”. As always, past moves are no guide to future performance, and investors may wish to seek independent financial advice before acting.
Sources: Reuters via Yahoo Finance, Yahoo Finance, Fox Business, Stocktitan, The National
