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U.S. stocks fell sharply Thursday, Nov. 5, as a sell-off in AI and semiconductor shares erased the previous session’s post-election gains. The Dow dropped 2.2%, the S&P 500 fell 3.3% and the Nasdaq lost 5%; the semiconductor index plunged 11%.
U.S. stocks plunged Thursday as investors sold AI and semiconductor shares, wiping out gains from the previous day’s post-election rally. The Dow Jones Industrial Average fell 2.2%, or more than 1,200 points, the S&P 500 dropped 3.3%, and the Nasdaq Composite declined 5%, according to Yahoo Finance’s Nov. 5 market report.
The sell-off was especially steep across chipmakers. The PHLX Semiconductor Index fell 11%, while shares of Nvidia, Micron and other semiconductor companies sank. Earlier in the session, Yahoo Finance reported that Nvidia shares were down more than 6% and Micron shares more than 12%; AMD fell more than 13% in that earlier update. Those intraday figures are snapshots, while the report’s later index figures describe the broader market move.
The declines reversed gains made Wednesday after Democrats won both chambers of Congress in the midterm elections. Investors were still weighing what the change in control could mean for policy and the economy, including the outlook for AI infrastructure spending and regulation. The market report did not identify a single cause for the technology sell-off beyond renewed pressure on those shares.
Oil moved in the opposite direction. Brent crude traded around $97 a barrel and U.S. benchmark West Texas Intermediate around $90, amid uncertainty over whether President Donald Trump would pursue a deal with Iran to end the Middle East war. A separate report from Challenger, Gray & Christmas said announced layoff plans in October fell to their lowest level since 2023, ahead of Friday’s U.S. employment report.
Chip Rout Reverses Election Gains
The sharp reversal shows how quickly Wednesday’s relief rally gave way to selling, particularly in the technology shares that had supported broader market gains. The 11% decline in the semiconductor index points to concentrated pressure in chipmakers rather than an evenly distributed move across all companies. Large swings in major indexes can affect retirement accounts and other investments tied to the U.S. stock market, though one session does not establish a lasting trend.
The decline also puts attention on how investors interpret the election result. Democrats’ control of both chambers may change expectations around legislation, regulation and public spending. The report said investors were still sorting out possible winners and losers; it did not establish that the election outcome caused the sell-off. Oil’s rise adds another market concern as traders assess developments in the Middle East and their potential effects on energy prices.
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From Rally to Broad Sell-Off
Wednesday’s gains followed the midterm elections, in which Democrats swept both chambers of Congress, according to the source report. Investors initially responded to the result with a post-election rally. On Thursday, that move reversed as technology and chip shares came under renewed pressure. The shift unfolded during the trading day: an earlier Yahoo Finance update recorded the Nasdaq down about 4%, the S&P 500 down 2.3% and the Dow more than 700 points lower; the later report put the losses at 5%, 3.3% and 2.2%, respectively.
Other developments provided a mixed picture. AppLovin shares rose in premarket trading after the company reported quarterly results and guidance above analyst estimates, while Wendy’s said it rejected a $1.4 billion takeover proposal from Trian Fund Management. Those company-specific stories did not prevent the broader market decline. The source also said Friday’s employment report was the next major scheduled economic release for investors to assess.
Drivers and Market Direction Unsettled
The report does not establish one definitive trigger for the sell-off or explain how much of the decline reflected election-related policy concerns, company-specific developments or broader investor positioning. It also does not provide closing prices for every stock mentioned in earlier intraday updates. The Nasdaq was described as being on track to close in a correction, but the supplied report does not confirm that it finished the session in correction territory.
It remains unclear whether Thursday’s losses mark a brief reversal or the beginning of a longer downturn. The source offers no subsequent trading data to answer that question. The timing or likelihood of any U.S.-Iran agreement is also unknown, as are the eventual market effects of the change in congressional control.
Employment Data Comes Into Focus
Investors were preparing for Friday’s U.S. employment report, which could offer a new measure of labor-market conditions. The Challenger, Gray & Christmas report on October layoff plans showed the lowest level since 2023, but that measure is distinct from the government’s employment data and does not determine what the official report will show.
Markets will also continue to respond to company earnings, developments in technology shares, and news on oil and the Middle East. Whether Thursday’s sharp losses persist cannot be determined from the available report; the next sessions and incoming data will show whether investors resume buying or continue to reduce exposure.
Key Questions
How much did the major U.S. stock indexes fall?
In the later figures reported Thursday, the Dow fell 2.2%, the S&P 500 declined 3.3%, and the Nasdaq Composite dropped 5%.
What drove the market decline?
Yahoo Finance tied the reversal to a sell-off in AI and semiconductor shares and said investors were weighing possible implications of the election. The report did not identify one definitive cause.
Did the Nasdaq close in correction territory?
The report said the Nasdaq was on track to close in a correction. The supplied material does not confirm its final closing status.
What market event was expected next?
The next major scheduled economic release mentioned in the report was Friday’s U.S. employment report. Its results were not available in the source material.
Source: finance.yahoo.com
