Nasdaq falls 5.5% into a correction as AI stocks crash two days after the midterms
CNBC's stat sheet puts the day in context: the worst session since the April 2025 tariff shock, sector by sector, plus what past Nasdaq corrections did next.
US stocks had their steepest one-day drop since April 2025 on Thursday, November 5. The Nasdaq Composite fell 5.5% and closed more than 11% below its October record, which puts it in correction territory; the S&P 500 lost about 4.4% and the Dow about 1,833 points, or 3.4%, according to CNBC.
AI-linked stocks led the decline as investors weighed whether Democratic wins in Tuesday's midterms, including a Texas governor-elect who campaigned on a data center moratorium, could slow data center construction. The tech sector fell 7.3%, its worst day since March 2020; the iShares Semiconductor ETF dropped 12%. The 'Magnificent Seven' lost more than $1 trillion in market value, with Nvidia down more than 9% and now negative for the year. The VIX volatility index posted its biggest point gain since April 2025.
CNBC notes that across 10 Nasdaq corrections in the past decade, the index averaged a 9.41% gain over the three months after the bottom, with 2022 the main exception.
Across the spectrum 3
Democrat
Texas Governor-elect Gina Hinojosa has pledged a moratorium on data center approvals until the Legislature passes "real protections so Texans can have a seat at the table," saying in an Oct. 22 video: "When I am governor I will issue a moratorium — a ban — on all data center approvals until laws can be passed by the Legislature to protect Texans," the Texas Tribune reports.
The Texas Tribune ↗Libertarian
Writing the day after the midterms, Reason's Christian Britschgi argued "it was a data center election after all," noting anti-data center positions won all but two of 41 local ballot measures, and said that while Trump has been wrong about much, "the president is right about the benefits of data centers. An anti-data center electorate punished him and his party accordingly."
Reason ↗Republican
In an Aug. 3, 2026 directive, Gov. Greg Abbott ordered Texas grid regulators to audit every data center seeking a grid connection before any project moves forward, saying "Our top priority is to protect Texans' safety and quality of life" and that noncompliant projects "must be denied connection to the Texas grid. Simply put, Texans must come first."
Office of the Texas Governor ↗-
Market correction
After exploring Nasdaq drops into correction territory — here’s what typically happens next, for what the word actually means, see Market correction.
Wikipedia defines a stock market correction as a drop of more than 10% in an index, measured from a recent high, and says a correction ends once stocks reach new highs.
Wikipedia · Wade · 5 min
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VIX
After exploring Magnificent 7 loses $1 trillion. The most eye-popping stats from Thursday's tech stock plunge, to understand the 'fear gauge' in the numbers, try VIX.
Wikipedia explains the VIX as the Cboe's index of the market's expected volatility, calculated in real time from S&P 500 index options and often called the fear gauge.
Wikipedia · Wade · 5 min
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