US stocks sold off sharply on Thursday, November 5, 2026, as a slide in chipmakers and other artificial-intelligence names dragged the Nasdaq Composite into a correction and wiped out the post-election rally of a day earlier. The Nasdaq fell 5.52% to close at 24,315.00, the S&P 500 dropped 4.36% to 7,353.73, and the Dow Jones Industrial Average fell 1,833.06 points, or 3.44%, to 51,523.06, according to market data reported by CNBC and compiled in closing summaries.

The damage was concentrated in the stocks that have led the market higher all year. The sell-off came one day after a powerful rally, when the Dow had jumped about 1,569 points, or 3%, on the result of the midterm elections. By Thursday's close that gain was gone.

What drove the sell-off

The trigger was a reassessment of the spending behind the AI boom. CNBC reported that the selling was driven by fears that the Democrats' win in the midterm elections would slow the enormous buildout of AI data centers, as public and political opposition to data-center growth hardened in several states. Weak results and cautious commentary from parts of the chip sector added to the pressure.

The move marked a reversal in sentiment rather than a single piece of bad news. In a research note cited by CNBC, MRB Partners wrote that "the U.S. mid-term election results will add to headwinds for big tech and the data center buildout." Strategists at UBS, cited by Reuters, estimated that roughly 30% of the data-center capacity expected to be added by 2028 is now at risk, a figure reported here as the firm's estimate rather than a forecast by this publication.

Chipmakers took the worst of it

Semiconductors, the clearest proxy for the AI trade, led the decline. Nvidia fell 9.26% to close at $181.60. Advanced Micro Devices dropped 17.26% to $404.40 and Micron Technology fell 17.46% to $656.39. Broadcom declined 10.43% to $291.53, and the AI data-center operator CoreWeave fell 9.83%.

The pain showed up across the sector's funds too. The iShares Semiconductor ETF fell more than 12%, which CNBC said was its worst single day since March 2020, and the VanEck Semiconductor ETF dropped 11.21%. When a group of stocks this large and this heavily weighted in the indexes falls together, the broad market has little chance of holding up, which is why a chip-led slide turned into a 4% day for the S&P 500.

A market-wide move, not just tech

Unlike Wednesday, when the gains were uneven, Thursday's losses were broad. The scale of the technology sell-off fed into the rest of the market, and every corner felt it. The retreat from risk showed up in other assets as well. Treasury yields fell as investors moved into government bonds, with the 10-year yield down about 6 basis points to 4.84%, and gold edged up around 0.6% to near $4,098 an ounce.

Volatility jumped. Cboe's VIX, the market's main gauge of expected swings, briefly reached 28.09, its highest level since March 31, 2026, CNBC reported. A reading in the high 20s signals real unease after a long stretch of calm. For readers trying to understand why a single measure gets so much attention on days like this, our explainer on the VIX sets out what it does and does not tell you, and how a stock market index can be swung by a handful of large stocks.

The backdrop: a rally reversed and the Fed in focus

The swing from Wednesday to Thursday was unusually violent. The election-day rally had been read as a vote for divided government and lower energy costs; our account of the post-election rally laid out the move and the warnings from strategists that it could prove temporary. One day later, those warnings looked prescient.

The sell-off also shifted expectations for monetary policy. Futures pricing tracked by CME's FedWatch tool and reported by CNBC put the odds of a quarter-point rate increase at the Federal Reserve's December 9, 2026 meeting at 70.1%, down from 82.7% the day before. The Fed held its policy rate steady at its October 28 meeting, and inflation, as measured by the September Consumer Price Index, was running at 3.7% over the year, above the Fed's 2% target. That mix, elevated inflation and a market suddenly worried about growth, is the backdrop the next Fed decision will be made against.

What to watch next

The immediate test came the next morning: the government's October jobs report was due before the open on Friday, November 6, 2026, the next hard read on the economy. Beyond that, three things will shape whether the sell-off deepens or steadies: how the largest AI and chip companies address the data-center spending question in their guidance, whether the political pressure on data-center expansion translates into actual policy, and the path of inflation into the December Fed meeting. A single day, however dramatic, is a data point rather than a trend, and a correction, a fall of 10% or more from a recent high, is a normal and recurring feature of markets rather than a prediction of what comes next.