Nasdaq Falls 4.4% and VIX Jumps 45% as Chip Stocks Plunge on Data Center Worries
The Philadelphia Semiconductor Index fell about 10%, wiping out Wednesday's gains in the S&P 500 and Nasdaq, as investors weigh possible limits on AI data center buildouts and a weak Qualcomm outlook.
U.S. stocks fell sharply on Thursday as chip and AI-linked shares tumbled, reversing Wednesday's post-midterm rally. At about 10:45 a.m. ET, the Nasdaq Composite was down 4.4%, the S&P 500 was down 2.9% and the Dow was down 1.8%, while the Cboe Volatility Index (VIX) jumped 45% to 24.11 at 10:25 a.m. ET. Figures below are intraday and change by the minute.
Where the major indexes stand
| Index | Level | Change | Context |
|---|---|---|---|
| Dow Jones Industrial Average | 52,402.51 | -1.79% | Down about 954 points from Wednesday's 53,356.12 close |
| S&P 500 | 7,468.73 | -2.86% | About 4.8% below its 52-week high of 7,844.52 |
| Nasdaq Composite | 24,610.32 | -4.38% | About 11% below its 52-week high of 27,722.75 |
| Nasdaq-100 | 27,019.78 | -4.98% | |
| Russell 2000 | 2,795.54 | -2.15% | |
| PHLX Semiconductor Index | 9,223.00 | -10.18% | Down about 1,046 points on the day |
| Cboe VIX | 24.11 | +45.15% | Up 7.50 from a 16.61 close; the intraday high was 24.49 and the 52-week high is 35.30 |
Index, stock, commodity and crypto levels are from quotes at about 10:45 a.m. ET, and the VIX reading is from 10:25 a.m. ET, when it was at 24.11. By about 10:45 a.m. ET it was near 23.9.
Why stocks are falling
- Data center worries. The Associated Press said AI-related stocks worldwide came under pressure over worries that Tuesday's midterm elections could bring moratoriums on data centers in some areas. Investors are weighing tighter regulation of the AI data center buildout and a possible public backlash. UBS strategists estimated about 30% of expected U.S. data center capacity additions in 2028 could face delays, as reported by Reuters.
- Qualcomm outlook. Qualcomm beat fourth-quarter estimates, but its first-quarter outlook fell short, with a weaker profit forecast tied to higher-cost components in its smartphone processor business. Shares were down about 12% at $152.07.
- Reversal of Wednesday. The Dow jumped 1,569 points on Wednesday after Democrats won Congress, and the S&P 500 and Nasdaq also rose. Thursday's drop in the S&P 500 and Nasdaq is larger than those gains.
- Strategist view. Jordan Watson of Tandem Investment Advisors said investors may face more volatility as they digest the election results and their policy implications, and that he would not treat Wednesday's trading as an all-clear signal.
Chip and AI stocks lead the decline
| Stock | Price | Change |
|---|---|---|
| AMD | $414.14 | -15.27% |
| Micron Technology | $685.26 | -13.83% |
| Arm Holdings | $167.28 | -12.78% |
| Marvell Technology | $139.72 | -12.57% |
| Qualcomm | $152.07 | -12.19% |
| Broadcom | $298.69 | -8.23% |
| Intel | $53.94 | -7.44% |
| Nvidia | $185.37 | -7.38% |
The selling spread beyond chips. Tesla fell 9.6% to $348.26 and SpaceX fell 9.2% to $123.44, while Microsoft fell 2.9% and Amazon fell 3.5%. Apple was down 0.3%. In early trading, CoreWeave was down about 9%, Nebius about 13% and Iren about 11%, according to market reports.
South Korea's Kospi fell 5.3%, and in Seoul SK hynix fell 9.0% and Samsung Electronics fell 6.7%.
Movers outside chips
- AppLovin (+31%). Shares rose to $356.66 after third-quarter revenue of $2.18 billion beat the $2.07 billion estimate and adjusted EPS of $4.30 beat $4.04. Fourth-quarter revenue guidance of $2.37 billion to $2.40 billion topped the $2.25 billion estimate.
- Fastly (-24%). Shares fell to $15.93 after third-quarter results and word that its go-to-market president plans to retire in 2027. See our Fastly analysis.
- Wendy's. The company rejected a $1.4 billion buyout offer from Trian, saying it undervalues the company, and announced a turnaround plan.
Rates, oil, gold and crypto
| Asset | Level | Change |
|---|---|---|
| 10-year Treasury yield | About 4.87% | Down about 2 basis points |
| WTI crude oil | $90.34 | +2.52% |
| Gold | $4,114.20 | +1.01% |
| Bitcoin | $76,305 | -5.11% |
| Ether | $2,275 | -6.11% |
Oil is rebounding after both major benchmarks fell more than 8% on Wednesday on hopes for an end to the U.S.-Israeli war on Iran, according to Reuters.
What to watch
- Data center policy. Whether state or federal officials move to limit data center construction, which is the main worry behind the AI selloff.
- Chips. Whether the semiconductor index stabilizes after its roughly 10% drop, and how Qualcomm's outlook shapes views of other handset-exposed chipmakers.
- Volatility. Whether the VIX stays above 20 after closing at 16.61 on Wednesday.
- Jobs report. Friday's employment report, the next major data point for the Fed and rates.
- Related coverage. See our Week Ahead, the Nasdaq research note, the Fastly analysis and AMD's earnings.
Sources: Market levels are from Google Finance quotes at about 10:45 a.m. ET, except the VIX, which is from a 10:25 a.m. ET quote, and all change by the minute. The reasons for the selloff are from the Associated Press, Reuters and other market reports, and company results are from their earnings releases. Context figures marked as about are rounded. This article is informational only and is not investment advice.
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