- The S&P 500 ended Thursday 4.4% lower, the Nasdaq 100 fell 6.4%, and the Dow Jones Industrial Average slipped 3.4%.
- Apple Inc. raised $7.5 billion from its high-grade bond offering.
- iShares Semiconductor ETF was down more than 12% for its worst day since March 2020, when COVID struck.
U.S. stock indices ended lower on Thursday, with futures extending declines after hours as investors heavily sold off tech and chipmaker stocks amid concerns a Democratic win could derail the pace of data center and AI buildout, delaying capex recovery.
The S&P 500 ended Thursday 4.4% lower, the Nasdaq 100 fell 6.4%, well in correction territory, and the Dow Jones Industrial Average slipped 3.4%. The Russell 2000, which tracks small-cap stocks, lost 4.5%.
S&P 500 futures lost 0.8%, while Nasdaq-100 futures slid 1.3%. Futures tied to the Dow Jones Industrial Average shed 264 points, or 0.5%.
The SPDR S&P 500 ETF (SPY) fell 4.5%, and the SPDR Dow Jones Industrial Average ETF (DIA) dropped 3.5%. Meanwhile, the Nasdaq-100 tracking Invesco QQQ Trust (QQQ) ended 6.5% lower on Thursday.
Meanwhile, the VanEck Semiconductor ETF (SMH) and the iShares Semiconductor ETF dropped between 11% and 12% each on Thursday amid weakness in Nvidia (NVDA), Micron Tech (MU),Broadcom (AVGO) and memory chip maker SanDisk (SNDK). The broader Vanguard Information Technology ETF (VGT) dropped 5.8%.
Retail sentiment on Stocktwits for SPY, QQQ, and DIA was ‘bearish.’
US Market Drivers
The sudden acceleration in the tech selloff was heavily catalyzed by the outcome of Tuesday's midterm elections, which saw Democrats capture majorities in both the Senate and the House of Representatives. Electoral campaigns increasingly centered around public pushback against massive data center developments, driven by community anxieties over escalating electricity costs, environmental strains, and grid reliability.
In Texas, newly elected Governor-elect Gina Hinojosa amplified these regional concerns by advocating for an immediate moratorium on new data center construction. Because data centers serve as the physical backbone for AI infrastructure—packed densely with rows of advanced semiconductors—any regulatory roadblock or deceleration in data center spending threatens to translate into severe long-term headwinds for chipmakers.
Investors are “stepping away until they get a better sense of the implications of the midterms around the AI capex cycle in particular, which is the biggest economic tailwind we’ve had going for us for the last, call it, three years,” Tim Holland, chief investment officer at Orion, told CNBC. “It’s about tone and tenor from the party that did really well, incredibly well, at the federal level and at the state level.”
Moreover, Big Short fame Michael Burry sold 25% of his put positions in the $58 billion VanEck Semiconductor ETF amid the deep sellout seen in tech shares. “The SMH put positions even after the sale, however, have become very large positions,” he wrote.
Key Trending Stocks
Nvidia is pursuing a plan to turn existing telecom facilities into small AI data centers as a way to deploy its chips more quickly and sidestep growing local resistance to new construction, The Information reported on Thursday.
Apple Inc. (AAPL) is set to raise about $7.5 billion from a high-grade bond offering, Bloomberg reported.
Shares of DoorDash (DASH) slumped 10% on Thursday after rivals Amazon (AMZN) and Uber Technologies (UBER) struck a partnership giving Amazon Prime members free delivery on Uber Eats restaurant orders of $25 or more when placed directly through Amazon’s website or app.
Yucca Growth Infrastructure LLC, the firm building power infrastructure for Oracle Corp.’s (ORCL) New Mexico data center, has reportedly agreed to waive a looming regulatory deadline, instead of risking an application denial.
Microsoft Corp. (MSFT) opted not to extend a major data center agreement with Nvidia-backed AI startup Nscale.
