Nasdaq Slides About 5% Intraday as AI Chip Selloff Spreads — What Is Driving the Rout?

Updated November 5, 2026 — U.S. trading session still underway at the reporting cutoff. Wall Street’s technology-heavy Nasdaq fell sharply on Thursday as investors reassessed the economics of artificial-intelligence infrastructure, the cost of financing new data centers and the prospect of tougher oversight following the U.S. midterm elections. Closing-market update (November 5, 2026): The Nasdaq Composite ultimately closed down 5.52%, entering correction territory, according to Reuters and Associated Press. The S&P 500 fell 4.36% and the Dow Jones Industrial Average declined 3.44%. These confirmed closing figures supersede the earlier intraday indications described below. Sources: Reuters closing-market report and Associated Press market summary.

What drove the selloff?

Reuters reported that the Nasdaq was down around 5% during Thursday’s session, with chipmakers and AI-infrastructure businesses among the hardest hit. The precise decline can change before the market closes. The selling followed a period in which investors had priced substantial future earnings growth into companies supplying AI processors, servers and data-center capacity.

Those expectations are sensitive to several pressures at once: higher borrowing costs make large construction projects more expensive; energy and infrastructure constraints complicate delivery schedules; and investors increasingly want evidence that AI spending will translate into durable cash flow. Election results have added uncertainty over future approvals and regulation, but it would be misleading to attribute every share-price move to a single political cause.

Why the wider market matters

AP reported broad weakness across major U.S. stock indexes, while Reuters described the rout spreading into global equities. Declines in semiconductor stocks can have outsized effects on indexes because several AI-related companies carry substantial market weights. A technical market correction refers to a fall of at least 10% from a recent peak; it does not by itself establish an economic recession or a lasting collapse in demand for AI.

What investors should watch next

Three developments will help distinguish a short-lived valuation reset from a deeper investment slowdown: whether major cloud companies maintain their capital-spending plans, whether financing for smaller data-center operators tightens further, and whether earnings forecasts are revised downward. Investors should also check the official closing index levels rather than treating afternoon quotes as final results.

Illustrative featured photograph: New York Stock Exchange exterior, by Maxim Klimashin via Unsplash. Not an image of today’s trading activity.