Nasdaq Biggest Drop in 19 Months on AI Regulation Fears

Quick Answer: The Nasdaq Composite fell 5.52% to 24,315.00 points on its biggest daily drop since April 2025, as fears of AI regulations hit chipmakers. The index also confirmed a technical correction, ending more than 10% below its Oct 6 record-high close. For shareholders, the numbers show how heavily US markets now depend on AI infrastructure stocks.

The Nasdaq’s biggest daily drop in 19 months came on Thursday. The Nasdaq Composite closed at 24,315.00 points after a 5.52% fall.

Why Did the Nasdaq Biggest Daily Drop Happen?

Nasdaq biggest daily drop in 19 months on AI regulation fears — The Nasdaq Composite’s biggest daily drop since April 2025 hit AI-linked stocks.

Democratic wins on Tuesday, including in states where opposition to new data centers has mounted, revived fears of tighter regulation. Those fears targeted the AI infrastructure buildout that had lifted stocks to record highs this year.

Melissa Brown, global head of investment decision research at SimCorp, said investors are recognising that newly elected members of Congress and governors want to slow AI infrastructure development. “While it seems unlikely that they will be able to stop it altogether, any slowdown would raise concerns,” she said.

Nasdaq Biggest Drop in 19 Months on AI Regulation Fears — Photo: Free Malaysia Today

How Deep Did the Nasdaq Sell-Off Cut Wall Street?

The S&P 500 dropped 4.36% to 7,353.73 points. The Dow Jones Industrial Average fell 3.44% to 51,523.06 points.

The selloff wiped US$3 trillion from the stock market value of S&P 500 companies. Volume on US exchanges hit 26.9 billion shares, against a 20-session average of 17.7 billion.

Which AI Stocks Fell Hardest in the Nasdaq Sell-Off?

Nvidia dropped over 9%.
The Philadelphia SE Semiconductor index plunged over 12%.
IREN and Applied Digital fell more than 14%.
CoreWeave dropped almost 10%.
GE Vernova fell 7.5%, while Constellation Energy fell 2.5%.
Qualcomm fell 9.5% after missing Wall Street estimates for fourth-quarter smartphone chip sales.
Meta Platforms slid 4%, while Amazon.com and Alphabet each dropped 2.2%.

Elon Musk’s Tesla and SpaceX both dropped. Musk spent nearly half a billion dollars backing Republican candidates in the midterm elections.

Jed Ellerbroek, portfolio manager at Argent Capital Management, called it “the capitulation phase” for data center capex beneficiaries. He added that “the magnitude of the moves is outsized.”

Is the Nasdaq Still Up in 2026 After the Correction?

Following Thursday’s selloff, the S&P 500 remains up 7.4% in 2026. The Nasdaq is up 4.6% for the year.

Wednesday’s rally gave the S&P 500 its biggest one-day percentage gain in three months, as political uncertainty eased. A divided government in Washington could mean fewer sharp legislative changes and harder fiscal spending agreements.

What Rate Signals Sit Behind the Nasdaq Correction?

Cleveland Federal Reserve President Beth Hammack and Richmond Fed chief Thomas Barkin hinted at future rate hikes on Thursday. Traders expect the Fed to hike next month, following the September rate hike.

Focus now shifts to the US October nonfarm payrolls data, due Friday.

What Does the Nasdaq Biggest Daily Drop Mean for Bursa Investors?

The source names no Bursa-listed company, so no Bursa stock code applies to this sell-off. Bursa investors can only read the US figures above as a signal of AI-linked risk.

Names worth monitoring from the source include Nvidia, CoreWeave and GE Vernova, given their steep falls. Investors comparing AI names can also read our AI Stock Analysis for Malaysians guide.

Key Takeaways

The Nasdaq Composite fell 5.52% to 24,315.00 points, confirming a technical correction.
The selloff wiped US$3 trillion from S&P 500 companies’ stock market value.
Chipmakers and data center names, including Nvidia and IREN, fell hardest.
The S&P 500 remains up 7.4% in 2026, while the Nasdaq is up 4.6%.

This article is for information only and is not investment advice. Do your own research before making any decision.

Frequently Asked Questions

Why did the Nasdaq fall 5.52%?

The Nasdaq fell after Democratic wins raised fears that tighter AI regulation could slow the data center buildout. The index closed at 24,315.00 points, its biggest daily drop since April 2025.

Is the Nasdaq in a correction?

Yes. The Nasdaq Composite ended more than 10% below its Oct 6 record-high close, confirming a technical correction.

How much did Nvidia fall in the Nasdaq sell-off?

Nvidia dropped over 9% in the sell-off. The Philadelphia SE Semiconductor index plunged over 12% in the same session.

How is the Nasdaq performing in 2026?

Following the selloff, the Nasdaq is up 4.6% in 2026. The S&P 500 is up 7.4% for the year.

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