Nasdaq Slides Toward Correction as Chip and Data Center Stocks Fall
Direct answer
US stocks fell sharply on Thursday, November 5, 2026, one day after a big midterm election rally. The Nasdaq Composite was down 3.09 percent by 9:57 a.m. Eastern time, at 24,941.44, while chip and data center stocks led the fall. The Nasdaq was on course to confirm a correction, which means a fall of at least 10 percent from its recent peak.
These are morning trading figures, not closing figures. The market was still open when this move was reported, so the final result for the day could be different.
What happened
The selloff reversed the mood from Wednesday, when stocks had jumped after Democrats won control of Congress. The Dow closed 1,569.40 points higher on Wednesday, up 3.00 percent to 53,356.12, while the S and P 500 gained 1.58 percent to 7,688.62 and the Nasdaq added 1.44 percent to 25,736.51. For background on that rally, see our earlier post on US stocks jumping on Wednesday after the midterms.
On Thursday morning the selling was concentrated in technology. Reuters reported that at 9:57 a.m. Eastern time the Dow was down 351.87 points, or 0.66 percent, to 53,004.25, the S and P 500 had lost 127.74 points, or 1.66 percent, to 7,560.88, and the Nasdaq had lost 795.08 points, or 3.09 percent, to 24,941.44. Later in the morning the Nasdaq was down nearly 4 percent to 24,712.60, more than 10 percent below its record close of 27,599.89 on October 6, which would confirm a correction if it closes there.
Chip stocks led the drop. The Philadelphia Semiconductor Index was down 7.1 percent at the morning snapshot, and a later Reuters update put it down 10.2 percent, its lowest in more than six months. Qualcomm fell 9 percent in early trading after its smartphone chip sales missed Wall Street estimates, and it was later down 12.8 percent. Its handset revenue, its largest business, fell 26 percent to 5.14 billion dollars. Our earlier post on Qualcomm beating expectations while phone sales slowed covers the same results from the earnings angle.
Data center and artificial intelligence stocks fell with the chipmakers. CoreWeave dropped 11.4 percent, and Reuters reported the Nasdaq 100 was set to lose 1.8 trillion dollars in value. Data center operators Applied Digital, Cipher Mining and IREN fell more than 18 percent in the later update, while Tesla fell 9.5 percent, Meta fell 3.4 percent, Amazon fell 3.9 percent and Alphabet fell 2.7 percent.
Why it matters for beginners
A correction is a fall of at least 10 percent from a recent high. It is a normal part of markets, and it is not the same as a bear market, which is usually a fall of 20 percent or more. The Nasdaq 100 had already entered a correction earlier in the week, as covered in our post on the Nasdaq 100 entering a correction on November 2. Thursday’s move put the broader Nasdaq Composite on course to join it.
The reason for the fall matters as much as the size. Investors are worried about two things at once. First, they fear that the Democrats’ midterm win could slow the rapid buildout of data centers, because new rules and public opposition could delay projects. Second, they are questioning how much big technology companies are spending on artificial intelligence, and how quickly that spending turns into profit. When a few crowded trades unwind at the same time, the fall can be fast.
For beginners, the key lesson is in our guide to what an index fund is and why beginners use it: a broad index fund follows a whole list of stocks, so a broad market fall pulls the basket down, while a broad rise lifts it. One sharp morning does not tell you what will happen by the close, or over the next month.
What to watch next
Watch the closing figures for Thursday, to see whether the Nasdaq confirms a correction by closing more than 10 percent below its October 6 record. Also watch what Democratic leaders in Congress say about data center rules and technology regulation, and whether chip companies give any update on demand. The October US jobs report is due on Friday, and it could move stocks, bonds and currencies again.
FAQ
What is a stock market correction?
A correction is a fall of at least 10 percent in an index from its recent peak. It is a normal part of investing and happens often, and it is not the same as a bear market, which is usually a fall of 20 percent or more.
Why did the Nasdaq fall on November 5, 2026?
Chip and data center stocks fell sharply after Qualcomm reported weak smartphone chip sales, and investors worried that the Democrats’ midterm win could slow data center expansion. Worries about heavy artificial intelligence spending added to the selling, one day after a big post election rally.
Why did chip stocks fall more than the rest of the market?
Chipmakers and data center companies had risen a lot on artificial intelligence hopes, so they had further to fall when sentiment turned. The semiconductor index fell more than 10 percent at one point, with Nvidia, AMD, Intel and Marvell among the stocks weighing on the market.
Does a correction mean I should sell my investments?
No. A correction by itself is not a reason to sell. Beginners should focus on their goal, their time horizon, and whether they can leave money invested through falls as well as rises, rather than reacting to one day of selling.
Sources
Reuters via Kitco, Wall St slumps as sharp tech losses put Nasdaq on course for correction, November 5, 2026: https://www.kitco.com/news/off-the-wire/2026-11-05/wall-st-slumps-sharp-tech-losses-put-nasdaq-course-correction
Reuters via Northland News Radio, Nasdaq 100 eyes $1.8 trillion loss as Democratic win sparks AI delay fears, November 5, 2026: https://northlandnewsradio.com/2026/11/05/ai-data-center-stocks-slip-as-democratic-sweep-clouds-expansion-plans/
Reuters via WTBX, Nasdaq falls at open after midterms-fueled surge as chip, data center stocks fall, November 5, 2026: https://wtbx.com/2026/11/05/nasdaq-falls-at-open-after-midterms-fueled-surge-as-chip-data-center-stocks-fall/
This article is for general information and education only. It is not legal or financial advice.
