Stocks Plunge
Nasdaq falls 5.5% as concerns over artificial intelligence spending and rising data center costs unsettle investors.
NEW YORK (GO WORLD) — U.S. stocks suffered heavy losses Thursday as a sharp decline in technology shares, particularly companies linked to artificial intelligence, wiped out the previous day’s market gains.
The S&P 500 dropped 4.4%, its steepest daily decline since April 2025, when President Donald Trump’s sweeping tariff announcements triggered turmoil across global financial markets.
The Dow Jones Industrial Average lost 1,833 points, or 3.4%, while the technology-heavy Nasdaq Composite plunged 5.5%.
The Nasdaq has now fallen 11.9% from its record high reached last month, placing the index in correction territory, generally defined as a decline of at least 10%.
AI Stocks Lead Market Decline
Shares of companies associated with the rapid expansion of artificial intelligence infrastructure were among the hardest hit.
Nvidia, the semiconductor giant that has become a central player in the AI industry, fell 9.3%, making it the largest contributor to the S&P 500’s decline.
The company’s shares are now down 2.6% for the year, following extraordinary annual gains of approximately 39%, 171% and 239% over the preceding three years.
Advanced Micro Devices plunged 17.3%, while CoreWeave, which provides cloud access to AI computing infrastructure, declined 9.8%.
GE Vernova, a major supplier of power equipment used in data center development, lost 7.5%.
The declines reflected growing investor concerns about the enormous costs associated with building and operating artificial intelligence data centers.
Higher borrowing costs have raised questions about whether technology companies can sustain the pace of infrastructure investment that has helped drive U.S. economic growth.
Some investors have also questioned whether valuations of leading AI companies have risen beyond what their expected earnings can justify.
Political Uncertainty Adds Pressure
Tuesday’s U.S. midterm elections introduced another source of uncertainty for the technology industry.
Democratic victories raised questions about whether new restrictions could affect the construction of additional data centers.
Communities across the United States have expressed concerns about the electricity consumption of large AI facilities and their potential impact on household energy bills.
A slowdown in data center development could affect demand for semiconductors, electricity generation equipment and other services supporting the AI industry.
Global Markets Feel the Impact
The technology sell-off extended beyond the United States, placing pressure on international stock markets.
South Korea’s Kospi index fell 5.3%, reflecting the vulnerability of markets with substantial exposure to semiconductor manufacturers and technology companies.
The sharp declines highlighted the increasingly important role AI-related businesses play in global equity markets.
Because companies such as Nvidia account for a significant share of major U.S. stock indexes, even relatively small changes in their share prices can have an outsized effect on overall market performance.
Thursday’s losses were widespread, with early gains across much of Wall Street disappearing as selling intensified.
The sell-off has renewed attention on whether the rapid expansion of artificial intelligence infrastructure can continue to support the valuations of the world’s largest technology companies.
Source: Associated Press reporting. Adapted for GO WORLD.
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