What matters most is not the size of the drop but what the market sold. The only confirmed facts are ballot results and campaign promises; no moratorium has been enacted and no hyperscaler has cut spending. Yet the semiconductor index lost more than 12%. That shows how fully the belief in uninterrupted AI infrastructure spending was priced in. With AppLovin up 31% and utilities down just 0.7%, the market as a whole wasn't abandoned; this reads better as crowded positions unwinding. That doesn't mean it's time to buy right away. Liquidations rarely end in one day, and Friday's jobs report could revive rate-hike fears. What needs checking now isn't price but three things: hyperscaler spending plans, actual state legislation, and several days of volume.
📊 Top Movers
🧭 Sector Performance
🇰🇷 Korean Investor Perspective
South Korea's KOSPI had already closed down 5.28% at 5,383.80 before New York's crash, with Samsung Electronics down 7.57% and SK hynix down 9.46%. Micron's 17.46% drop and the 12.25% fall in the US chip index point to more pressure on November 6. The won weakened from 1,342.1 per dollar at the Seoul close to 1,357.46 in New York trading per Yahoo. For Korean investors without currency hedging, the stronger dollar trims losses: QQQ (a Nasdaq-100 ETF) is down about 5.5% in won terms and SPY (an S&P 500 ETF) about 3.4%. Currency gains cannot offset leveraged losses in SOXL (-38.53%) or TQQQ (-18.92%), so leverage is the first thing to review.
📊 Market Overview
Wall Street collapsed on Thursday, November 5, as investors dumped AI-related stocks. The S&P 500 fell 334.89 points (-4.36%) to 7,353.73, the Nasdaq Composite lost 1,421.51 points (-5.52%) to 24,315.00, and the Dow Jones Industrial Average dropped 1,833.06 points (-3.44%) to 51,523.06. CNBC called it the Nasdaq's worst day since April 2025, and Yahoo Finance reported that the index closed in correction territory. The Nasdaq-100 fell 6.36% to 26,629.81, and the Russell 2000 lost 4.53% to 2,727.61.
The mood flipped completely from the day before. On November 4, the Dow jumped 3.03% as investors treated the Democratic sweep of both chambers as the end of uncertainty. Fortune said that rally lasted just one day before $3 trillion vanished. Wednesday's market bought the good side of the political event; Thursday's priced in the risk that AI data center investment gets delayed.
Fear gauges surged as well. The VIX hit 28.09 intraday, its highest since the end of March, and closed in the 27 range, up more than 60% from Wednesday's 16.61 close. The Philadelphia Semiconductor Index plunged 12.25%, from 10,268.65 to 9,011.14, and that single group accounted for much of the Nasdaq's decline. Bitcoin also fell about 5%, to around $76,000.
🔑 Key Issues
1. The election result turned into an AI infrastructure risk According to Ballotpedia figures cited by CNBC, 41 local ballot measures across 10 states sought to restrict data center construction, and voters sided against data centers in every case except one in Harwood, North Dakota. Fortune reported that Texas Gov. Greg Abbott paused new data center permits in September pending a grid audit, and that Democrat Gina Hinojosa, who beat Abbott, has called for an immediate moratorium. Wells Fargo estimates that 27% of planned data center gigawatts are in Texas. UBS strategists see about 30% of 2028 data center additions at risk. Even so, no enacted national or state moratorium was reported as of November 5, and no hyperscaler has announced spending cuts. Thursday's selling priced in fear, not confirmed demand loss.
2. Chip rout: good earnings didn't help SanDisk (-22.26%), Lumentum (-18.68%), Micron (-17.46%), AMD (-17.26%), Lam Research (-16.36%), Applied Materials (-13.58%), Broadcom (-10.43%), Intel (-10.33%), and Nvidia (-9.26%) all sank together. TSMC's US-listed shares fell 10.78%. AMD could not overcome the pressure despite beating estimates two days earlier; CEO Lisa Su told Yahoo Finance that the market can sometimes be a little short-sighted. Power and cooling names were hit too, with Bloom Energy (-16.41%), Vertiv (-14.02%), and GE Vernova (-7.48%) lower, while neoclouds Nebius (-14.94%) and CoreWeave (-9.83%) also tumbled.
3. Qualcomm and Arm: margins and outlook over headline numbers Qualcomm posted fiscal Q4 non-GAAP revenue of $10.4 billion and EPS of $2.17. It guided next-quarter revenue to $10.4–11.2 billion and EPS to $2.15–2.35. The market's concern was the chip segment's operating margin, expected to fall from 24% to 20–22% as supply costs rise. Shares fell 9.49%. CEO Cristiano Amon said the issue is supply, not demand. Arm's revenue rose 27% to $1.44 billion and EPS of $0.52 beat the $0.48 estimate, but the stock still fell 13.08%.
4. Retail capitulation and institutional de-risking Vanda Research's Viraj Patel said retail investors had net-sold $358 million in individual stocks as of 2:58 p.m. ET, the biggest selling day since March 17, 2020. Nomura's Charlie McElligott pointed to hedge funds locking in gains for the year. The market was digesting news and also absorbing a positioning shock as crowded trades unwound at once. Asia took the hit first: the KOSPI fell 5.28%, Taiwan 3.2%, and the Nikkei 1.8% before New York picked up the selling.
5. Winners on their own: strong results moved separately AppLovin soared 31.04% after Q3 revenue of $2.18 billion and EPS of $4.30 beat estimates, with Q4 revenue guidance of $2.37–2.40 billion above the $2.25 billion consensus. Unity (+14.93%) reported its first GAAP-profitable quarter since listing, and Krispy Kreme (+30.68%) and Tapestry (+7.07%) also rose. That suggests a day when the crowded AI infrastructure trade unwound, rather than indiscriminate selling of everything.
📊 Sector Performance
| Sector | Change | Key Driver |
|---|---|---|
| Technology | -8.04% | Chips and software sold together, Nvidia -9.26% |
| Industrials | -4.12% | Power and data center equipment weak, Caterpillar -6.37% |
| Consumer Discretionary | -3.83% | Tesla -10.77% weighed on the group |
| Materials | -2.91% | Risk aversion and cyclical selling |
| Energy | -2.90% | Fell with the market despite the oil rebound |
| Financials | -2.85% | Goldman Sachs -6.36%, Morgan Stanley -5.94% |
| Health Care | -2.50% | Large caps sold, including Eli Lilly -3.55% |
| Real Estate | -1.82% | Broad risk aversion despite lower yields |
| Consumer Staples | -0.75% | Defensive profile limited losses |
| Utilities | -0.71% | Duke Energy +0.38%, Southern +0.24% held up |
| Communication Services | -0.59% | Relative strength on stock-specific catalysts such as AppLovin |
All 11 sector ETFs fell. The gap between Technology and Communication Services exceeded 7 percentage points.
🌍 Global Markets
- Europe STOXX 600: 654.87 (-0.38%). Europe closed before New York's late losses, limiting the decline. The Bank of England raised its Bank Rate 25bp to 4% on an 8-1 vote.
- Dollar Index (DXY): 101.61 (+0.10%). A small gain, with no clear rush into the dollar.
- 10-Year US Treasury Yield: 4.84% (-6bp). Money leaving stocks moved into Treasuries. CME FedWatch odds of a December rate hike fell to 70.1% intraday from 82.7% on Wednesday.
- WTI Crude: $90.52 (+2.72%). Oil rebounded after Wednesday's 8% plunge, with the direction of Iran talks still uncertain.
- Gold: $4,092.40 (+0.48%). Safe-haven demand was present but the gain was modest.
🚀 SPCX (SpaceX) Update
SPCX fell 9.05% to close at $123.62. Volume of about 168 million shares was well above the one-month average of about 105 million, and the stock dropped below $135 from Wednesday's $135.92 close.
CNBC pointed to Elon Musk's heavy spending on Republican campaigns as a reason for the weakness in SpaceX and Tesla (-10.77%). Yahoo Finance also noted what the Democratic sweep could mean for merger prospects. With its heavy AI capital spending, the stock was also hard pressed to escape the day's AI selling.
⚠️ Investor Cautions
The biggest risk is leverage. TQQQ fell 18.92% and the 3x semiconductor ETF SOXL dropped 38.53%. In products like these, higher volatility can leave losses unrecovered even if the underlying index rebounds. When weighing dip buying, check whether your account can survive the next shock before thinking about your average cost.
It also helps to weigh the news carefully. Policy risk is still at the stage of ballot measures, campaign promises, and analyst estimates; no actual drop in demand has been confirmed. At the same time, a 12% one-day crash does not automatically mark a bottom. Only several days of volume and volatility will show whether the liquidation is over, and Friday's jobs data could add another burst of volatility if it shifts the rate path.
👁 What to Watch Tomorrow
- S&P 500 around 7,350: The index closed near its 7,350.35 low. Failure to hold that line would mean dip buyers have not arrived yet; reclaiming 7,500 is the first confirmation of a rebound.
- Nasdaq 24,262 and SOX 9,000: These are the Nasdaq's intraday low and the chip index's psychological line. Whether SOX holds above 9,000 will define the quality of any bounce.
- October nonfarm payrolls (8:30 a.m. ET): The Dow Jones consensus is +59,000 and the Reuters survey +65,000, versus +29,000 in September with unemployment at 4.2%. A big upside surprise could revive December rate-hike fears, while a big miss could add growth fears to tech selling. The market would most welcome a result near consensus.
- VIX 30: A move above 30 from the 27 range could trigger more forced selling, while a drop below 25 would be the first sign that fear is easing.
- After-hours gainers: Per Yahoo quotes, the last after-hours trades showed Cloudflare about 15% and Airbnb about 11% above their regular-session closes. Detailed results could not be confirmed at the time of writing. Whether those gains hold after the open will show if investors are willing to buy strong earnings again.
💡 Upcoming Events
- Nov 6 (Fri): October nonfarm payrolls, Oklo earnings
- Nov 10 (Tue): October CPI, CoreWeave earnings
- Nov 12 (Thu): Cisco, Applied Materials, and Nebius earnings
- Nov 17 (Tue): Nvidia earnings (per Yahoo Finance's scheduled date)
- Dec 9 (Wed): December FOMC rate decision
📚 Sources
- AI meltdown: Chip stocks and neoclouds plunge, pushing Nasdaq to worst day since April 2025 — CNBC
- Stock market today: Dow plunges 1,800 points, Nasdaq enters correction in AI trade meltdown — Yahoo Finance
- The AI Chip Selloff Spreads Across the Stock Market Today Live, November 5, 2026 — StockTitan
- Wall Street's best post-midterm rally in 44 years lasted just one day — Fortune
- S&P 500 drops 3% in worst day since 2025 as AI chips slide — AP (Spectrum News)
- 10-year Treasury yield falls as traders exit tech stocks, look ahead to jobs data — CNBC
- Qualcomm Q4 2026 Earnings Call Highlights — Yahoo Finance
- AMD earnings beat the Street. Here's what analysts are saying — CNBC
- Live: Can Cloudflare's Q3 Earnings Tonight Spark a Rebound After 10% Slide Today? — 24/7 Wall St.
- KOSPI tumbles on data center regulation fears; sell sidecar triggered — Hanyang Economy
- KOSPI plunges 5.28% to the 5,383 level — Topstar News