The Nasdaq correction risk returned on Wall Street as sharp tech losses hit chip and AI stocks. The sell-off followed a session in which a benchmark index posted its biggest one-day percentage gain in three months.
Why Did the Nasdaq Fall 3.09% in Early Trade?
At 9.57am, the Nasdaq Composite fell to 24,941.44, while the S&P 500 lost 127.74 points, or 1.66%, to 7,560.88.
The Dow Jones Industrial Average dropped 351.87 points, or 0.66%, to 53,004.25, the smallest decline of the three indexes.
How Far Did Chip Stocks Fall After Qualcomm’s Miss?
Qualcomm slid 9% after missing Wall Street estimates for fourth-quarter smartphone chip sales, citing sluggish demand and declining Apple-related revenue.
The semiconductor index was down 7.1%, with losses in Nvidia, Advanced Micro Devices, Intel and Marvell Technology weighing heavily.
Which AI Infrastructure Stocks Fell Hardest?
- Nebius Group shed 13.4%
- Dell, the AI server maker, dropped 10.5%
- CoreWeave shed 9.3%
- IREN, Hut 8 and Applied Digital fell between 6% and 11%
- GE Vernova and Constellation Energy, exposed to the data centre boom, traded lower
Why Are Data-Centre States Turning Against the AI Buildout?
Chip and AI infrastructure names slipped further after the Democrats’ election victory, including in some key data-centre states. Public opposition to the industry’s rapid expansion has been growing in those states.
Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said there is a chance the two years of extra push from the Trump government for AI buildout will be scaled back. “We suspect there is going to be some scrutiny on this aggressive AI buildout,” she said.
What Happened to Tesla, Meta and Other Big Tech Names?
Tesla tumbled 9.5% and SpaceX eased 6.7%, extending losses. Elon Musk spent nearly half a billion dollars backing Republican candidates, including efforts to keep them in control in Texas, the home state of both companies.
Meta Platforms slid 3.4%, while Amazon.com and Alphabet were slightly lower. Snap fell 12% after missing third-quarter revenue estimates, but AppLovin jumped 32% after beating third-quarter profit estimates.
What Is the Fed Rate Outlook Now?
Cleveland Federal Reserve President Beth Hammack, in comments on Thursday, favoured a gradual rate-hike path to lower inflation. Traders currently expect the Fed to hike rates next month, following the September rate hike.
Central banks acknowledge inflation remains elevated after crude oil prices surged on the Middle East conflict, though a sharp drop in oil prices aided sentiment. The US October non-farm payrolls data is due Friday.
How Lopsided Was Nasdaq Trading?
- Declining issues outnumbered advancers 2.17-to-1 on the Nasdaq
- Declining issues outnumbered advancers 1.36-to-1 on the NYSE
- Nasdaq recorded 132 new 52-week highs and 247 new lows
- S&P 500 posted 69 new 52-week highs and 3 new lows
- Five of 11 major S&P 500 sectors were negative, with tech and consumer discretionary leading losses while energy gained the most
Does This Sell-Off Touch Bursa Malaysia Stocks?
The source names no Bursa Malaysia listing, so no stock code, RM figure or local sector data is cited here. The companies in focus are US-listed, and the link for Malaysian readers is the AI buildout theme.
Investors tracking AI themes can compare stock-screening approaches in our AI Stock Analysis for Malaysians guide.
Key Takeaways
- The Nasdaq Composite fell 3.09% to 24,941.44 at 9.57am.
- Qualcomm slid 9% and the semiconductor index was down 7.1%.
- CoreWeave and Nebius shed 9.3% and 13.4%, while Dell dropped 10.5%.
- Traders expect the Fed to hike rates next month, and October non-farm payrolls are due Friday.
- Worth monitoring: whether scrutiny of the AI buildout grows after the Democrats’ election victory.
Disclaimer: This article is for general information only and does not constitute investment advice. Do your own research before making any investment decision.
Frequently Asked Questions
How much did the Nasdaq Composite fall during the sell-off?
The Nasdaq Composite lost 795.08 points, or 3.09%, to 24,941.44 at 9.57am. Its decline was the largest of the three major US indexes that morning.
Why did Qualcomm shares fall 9%?
Qualcomm fell 9% after missing Wall Street estimates for fourth-quarter smartphone chip sales. The company cited sluggish demand and declining Apple-related revenue.
Does the Wall Street sell-off affect Bursa Malaysia stocks?
The source article names no Bursa Malaysia-listed company, so it gives no direct local impact figures. Readers should do their own research before drawing any conclusion for their Bursa holdings.
What is the Fed expected to do after the sell-off?
Traders currently expect the Fed to hike rates next month, following the September rate hike. Cleveland Fed President Beth Hammack favoured a gradual rate-hike path to lower inflation.
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Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always do your own research before making investment decisions.
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