AI rout erases $2.3 trillion from the Nasdaq 100 as chip stocks fall 12 percent

The artificial intelligence trade suffered its worst session since March 2020 on Thursday, November 5, after the Democratic sweep of the midterm elections raised fears of tighter oversight of AI and slower data center construction. The Nasdaq 100 fell 6.4 percent, erasing a record $2.3 trillion in market value and leaving the index down nearly 15 percent from its October 6 record, while the Philadelphia Semiconductor Index fell 12 percent and the S&P 500 lost 4.4 percent. Nvidia fell more than 9 percent, its deepest slide since January 2025.

The selloff spread to Asia on Friday, November 6, where the MSCI Asia Pacific index fell as much as 5.3 percent and South Korea's Kospi fell 8.8 percent, triggering an automatic trading halt. Reporting on the follow-through notes that some market participants read the move as a mass unwinding of similar positions rather than a reassessment of AI fundamentals, and the question for the sector is whether the correction extends or stabilizes.

Sources: The Hindu BusinessLine; Mezha