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U.S. stocks reversed Wednesday’s post-election rally on Thursday, with the Dow down 2.2%, the S&P 500 down 3.3% and the Nasdaq down 5% in late trading. Semiconductor shares fell sharply, while oil rose; the final closing figures and the full causes of the sell-off were not yet established in the report.
U.S. stocks fell sharply Thursday, wiping out gains from the previous day’s post-election rally as investors sold artificial-intelligence and semiconductor shares. The Dow Jones Industrial Average was down 2.2%, the S&P 500 fell 3.3% and the Nasdaq Composite dropped 5% in the figures reported by Yahoo Finance; those were intraday declines, not confirmed closing results.
The sell-off was especially severe among chipmakers. The PHLX Semiconductor Index fell 11%, while Nvidia, Micron and other chip stocks sank. Yahoo Finance reported that Nvidia, Broadcom, Micron and AMD were among the S&P 500’s hardest-hit companies. By midmorning, the S&P 500 had shed more than $2 trillion in market value, according to the report.
The reversal followed a strong Wednesday session after Democrats won control of both chambers of Congress in Tuesday’s midterm elections. The Dow had risen 3% Wednesday, its strongest post-midterm-election day since 1982, while investors responded to falling oil prices and lower Treasury yields. On Thursday, the Nasdaq erased its post-election gains within minutes, Yahoo Finance reported, as investors reconsidered what a change in congressional control could mean for policy and markets.
Oil moved in the opposite direction from stocks. Brent crude traded around $97 a barrel and U.S. benchmark West Texas Intermediate around $90, amid uncertainty over whether President Donald Trump would pursue a deal with Iran to end the war in the Middle East. A separate report from Challenger, Gray & Christmas said October layoff plans fell to their lowest level since 2023, ahead of Friday’s employment report.
A One-Day Rally Reversed
The sharp reversal shows that the election result did not settle investors’ outlook for U.S. policy or the economy. Wednesday’s gains came amid relief over election uncertainty; Thursday’s losses reflected fresh questions about which industries could face regulatory or policy changes under a Democratic-controlled Congress. The market moves do not, on their own, establish that any specific policy caused the sell-off.
The concentration of losses in chip and technology stocks matters because those companies are central to the market’s recent enthusiasm for artificial intelligence and the data centers built to support it. A steep decline in a large sector can weigh heavily on major indexes. The report also described a sharp rise in the CBOE Volatility Index, which briefly climbed more than 65% to 27.45, indicating a sudden increase in expected market volatility—not a forecast of a particular outcome.
For households and investors, the declines may affect retirement and brokerage account values, while rising oil prices could add pressure to energy costs if they persist. Thursday’s trading does not establish how long either move will last.
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From Election Relief to Repricing
Tuesday’s midterm elections put Democrats in control of both the House and Senate, according to the report. On Wednesday, stocks rallied as investors welcomed the outcome and falling oil prices and Treasury yields. By Thursday, markets were reassessing possible implications for areas including AI infrastructure and energy policy.
Yahoo Finance reported that SpaceX and Tesla shares each fell more than 9% amid questions about data-center development and a possible merger between the companies. Those concerns were described as investor worries, not confirmed regulatory action or a completed merger plan. Dan Ives, a partner and managing director at Yorkville, wrote that a potential merger would face a tougher regulatory path in 2027 under the changed political landscape.
The report also noted that the Dow’s prospective second session after a midterm election would be its worst in data dating to 1896. That historical comparison describes the market’s performance in the available record; it does not explain the cause of Thursday’s decline.
Closing Levels and Policy Effects
The figures available in the report were intraday readings, so the final closing levels were not established there. It was also unclear how much of the sell-off reflected election-related policy concerns versus other market forces, including positioning in high-performing technology shares, changing expectations for interest rates or broader risk aversion.
No specific new regulation targeting chipmakers or data-center projects was reported. The concerns about the sector, and about a possible SpaceX-Tesla merger, remain investor assessments rather than confirmed government decisions. The longer-term direction of oil prices and the effect of the election on legislation also remain unsettled.
Employment Data and Market Close
Investors were awaiting Friday’s U.S. employment report for further information about labor-market conditions. October layoff plans had fallen to their lowest level since 2023, according to Challenger, Gray & Christmas, but that company report is not a substitute for the government employment figures.
Markets will also continue to watch oil prices and signals about the incoming Congress’s approach to AI infrastructure, energy and other industries. The next clear measure of Thursday’s losses will be the official closing figures; any conclusions about lasting market or policy effects will require further trading and concrete legislative or regulatory developments.
Key Questions
How far did the major U.S. indexes fall?
In the intraday figures reported by Yahoo Finance, the Dow fell 2.2%, the S&P 500 declined 3.3% and the Nasdaq dropped 5%. The report did not provide final closing figures.
What drove the Thursday sell-off?
The report pointed to heavy selling in AI and semiconductor shares and said investors were reassessing the implications of Democrats’ election gains. It did not establish a single cause for the market decline.
How badly did semiconductor stocks fall?
The PHLX Semiconductor Index was down 11% in the report’s intraday figures. Nvidia, Micron, Broadcom and AMD were among the stocks identified as particularly hard hit.
Did the Nasdaq close in correction territory?
The report said the Nasdaq was on track to close in a correction after falling 5% intraday. It did not confirm a closing level or establish whether the index met the correction threshold at the close.
What market information was due next?
Investors were looking ahead to Friday’s employment report. They were also watching oil prices and potential policy signals from the new Congress, though specific legislative or regulatory outcomes remained unknown.
Source: finance.yahoo.com
