AI stocks fall sharply, taking the S&P 500 down 4.4% in a day
Nvidia fell 9.3% and AMD 17.3%; the Nasdaq closed 11.9% below its October high. AP cited data-centre borrowing costs and post-midterm building-pause risk, and shares recovered part of the loss on 6 November.
- Money & business
- Compute & infrastructure
- Notable
US stocks fell sharply on Thursday 5 November, led by companies tied to AI infrastructure. According to the Associated Press, the S&P 500 fell 4.4%, or 334.89 points, to 7,353.73, its worst day since the tariff sell-off of April 2025. The Dow Jones Industrial Average lost 1,833.06 points, or 3.4%. The Nasdaq composite sank 5.5% to 24,315.00, which AP put 11.9% below its all-time high of the previous month, a drop it described as a correction.
Nvidia fell 9.3% and was the largest single drag on the index; AP noted it was still down 2.6% for the year. AMD fell 17.3% and CoreWeave, which rents out AI chips, 9.8%. GE Vernova, which supplies equipment for data centres, fell 7.5%. Markets elsewhere followed: South Korea’s Kospi fell 5.3% and Japan’s Nikkei 225 1.8%. AppLovin, an advertising-technology company, was among the few large gainers, up 31% after results above analysts’ forecasts and a board-approved buyback of up to $3.2bn.
AP attributed the fall to two main worries. One was that expensive borrowing could slow the construction of new AI data centres. The other was political: after Democratic wins in the midterm elections, and local ballot measures backing limits on data centres, AP wrote, governments might pause data-centre building, since voters across parties were wary of AI and of power bills tied to data centres. AP also reported critics’ view that AI share prices had risen too high and formed a bubble. Nvidia and the other chip makers are among the market’s largest stocks, so their moves weigh heavily on index returns.
On Friday 6 November, AP reported a partial recovery. In its midday report, the S&P 500 was up 0.9%, trimming its loss for the week to 2.1% and leaving it 5.1% below its October high. Nvidia rose 3.7%, after falling 9.3% and 3.2% in the previous two sessions. Tokyo and Seoul indexes had each dropped 6% following the US fall. A jobs report showing many more hires than economists expected pushed the 10-year Treasury yield up to 4.85% and raised traders’ bets on a Federal Reserve rate rise in December, AP said.
The fall followed big-tech earnings that had already put capital spending under investor scrutiny, and sat alongside the stock and bond sales companies were making to pay for it. The causes above are the ones AP reported; a single-day fall of this size has no one confirmed explanation.