Stocks fell as a tech rout gripped the market: Thursday recap

Wall Street sold off hard on Thursday. The decline reversed the previous day’s rally and left the major gauges well below where they started the week. The Nasdaq Composite dropped 5.52% to close at 24,315.00, its steepest fall in months. The S&P 500 lost 4.36% to 7,353.73, and the Dow Jones Industrial Average fell 1,833.06 points, or 3.44%, to 51,523.06. The selling was heaviest where this year’s gains had been largest. The technology-heavy Nasdaq took the worst of it, while the price-weighted Dow held up comparatively better.

Every sector finished lower. The damage was lopsided. Technology dropped 8.00%, nearly double the fall of any other group. Industrials lost 4.12%, consumer discretionary 3.83%, energy 2.98%, materials 2.91%, and financials 2.87%. Health care eased 2.50% and real estate 1.82%. The defensive corners absorbed far less. Communication services slipped 0.59%, the smallest decline of the eleven, with utilities down 0.71% and consumer staples down 0.75%. Close to seven and a half percentage points separated the best sector from the worst, a reminder that the selling stayed concentrated in one part of the market and spared the defensive groups much of the pain.

The driver sat in the AI trade. Chipmakers and the largest technology companies led the retreat, pressured by mounting worry over how much the buildout of AI data centers now costs and whether that wave of spending has already peaked. The selling also carried an echo of Tuesday’s midterm elections. Investors weighed whether the new balance of power in Washington could slow data-center construction, a prospect that hangs over the firms supplying the chips and the electricity behind it. By the close, the Nasdaq had dropped into what traders call correction territory, giving back a stretch of the gains that had carried it to a record just last month. The pullback cut deepest among the semiconductor makers and the cloud giants whose spending plans have defined this year’s advance.

Small caps fell with the giants. The Russell 2000 dropped 4.59%, close to the S&P 500’s loss, a sign the selling reached the broad market rather than the mega-cap leaders alone. Fear priced in fast. The Cboe Volatility Index jumped 69.66% to 28.18, a move that unwound months of calm in a single session. In the bond market, the yield on the 10-year Treasury note barely budged, edging up to 4.95%.

The damage went deeper than one session. The funds tracking the S&P 500 and the Nasdaq-100 are down 4.73% and 9.55% over the past five trading days, while the Dow’s tracker has slipped a milder 1.62%. The groups that led the market higher for much of the year gave back the most. Technology is off 13.97% on the week and energy 10.30%, a sharp unwind in the corners tied to the AI and power-infrastructure buildout.

The week is not done. The October jobs report lands Friday, and a reading on consumer inflation follows next week. A fresh round of corporate earnings arrives alongside the data. Together they will shape how investors judge the path for interest rates after a session this rough.

This is a general-market summary for information only — not investment advice, and not a recommendation regarding any security.