Nasdaq Drops 5.5% as AI Sell-Off Erases Wall Street Rally

A rally gives way to a rout

November 5, 2026 · 4:29 p.m. Central / 5:29 p.m. Eastern

U.S. stocks fell sharply Thursday as investors sold shares tied to artificial intelligence and data centers, wiping out the market’s gains from the previous day’s post-election rally.

The Nasdaq Composite dropped 5.5%, the S&P 500 fell 4.4%, and the Dow Jones Industrial Average lost 1,833 points, or 3.4%, according to the Associated Press closing report. Yahoo Finance independently reported the same rounded declines.

It was the S&P 500’s worst day since April 2025, AP reported. The Nasdaq finished 11.9% below its October record, placing it in a correction — a decline of at least 10% from a recent high.

Thursday’s closing figures

Figures are from AP’s report after the New York market close:

• S&P 500: 7,353.73, down 334.89 points or 4.4%.
• Dow Jones Industrial Average: 51,523.06, down 1,833.06 points or 3.4%.
• Nasdaq Composite: 24,315.00, down 1,421.52 points or 5.5%.

The figures describe one trading session; prices can move again when markets reopen.

AI spending comes under scrutiny

Shares of companies linked to AI infrastructure led the decline. Nvidia fell 9.3% and Advanced Micro Devices dropped 17.3%, AP reported. Large companies carry substantial weight in market indexes, so their moves can strongly influence the overall numbers.

AP and Reuters described investor concerns about the cost of AI infrastructure and the possibility of tighter scrutiny of data-center construction after Democrats won control of Congress. These are reported market explanations, not proof that any one development caused the sell-off.

Brent crude rose to $98.29 a barrel after falling the previous day, while the yield on the 10-year U.S. Treasury declined to 4.84%, according to AP. Those measures reflect different markets and can change independently.

A quick reversal

Wednesday’s post-election rally had lifted the Dow roughly 3%, as Newstro reported. Thursday’s selling more than erased the broad market’s prior-day gain, according to AP.

A correction describes the size of a decline, not a prediction of what comes next. Investors are still weighing company earnings, borrowing costs and future demand for AI infrastructure.

Two days of trading

Dates and the regular market close are Eastern time.

1. November 4 Major indexes rose after the midterms; the Dow gained roughly 3%.
2. November 5 AI and chip-related shares came under pressure during trading.
3. 4 p.m., November 5 The regular U.S. session closed with the Nasdaq down 5.5% and the S&P 500 down 4.4%, AP reported.

Reuters on the market close

Reuters reported the Nasdaq’s sharp decline and correction on X. Its reference to concern about potential AI regulation is an account of market sentiment, not a finding that any particular policy caused the losses.

Read Reuters’ post on X

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Sources and visual credits

Associated Press closing figures · AP market report · Yahoo Finance close report · Reuters on X.

Hero and thumbnail: generated conceptual illustration. The arrow is decorative and is not a chart of actual prices.