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U.S. stocks reversed Wednesday’s post-election rally on Thursday, with the Dow down 2.2%, the S&P 500 down 3.3% and the Nasdaq down 5% in the latest reported figures. Semiconductor shares led the decline, while oil rose amid uncertainty over the Middle East war and the outlook for a possible U.S.-Iran deal.
U.S. stocks fell sharply Thursday, giving back the gains from the previous day’s post-election rally as investors sold semiconductor and other technology shares. In the latest figures reported by Yahoo Finance, the Dow Jones Industrial Average dropped 2.2%, the S&P 500 fell 3.3% and the Nasdaq Composite slid 5%, leaving the tech-heavy index on track to close in correction territory.
The sell-off gathered force after a mixed start to the session. Yahoo Finance’s live report said the Dow initially rose 0.6%, while the S&P 500 edged down 0.3% and the Nasdaq fell 1%. By a later update, the Nasdaq was down about 4%, the S&P 500 had fallen 2.3% and the Dow had lost more than 700 points. The report’s later summary gave steeper losses: 2.2% for the Dow, 3.3% for the S&P 500 and 5% for the Nasdaq.
Chipmakers bore much of the pressure. The PHLX Semiconductor index fell 11% in the latest report, with Nvidia, Micron and other chip stocks dropping. In an earlier update, Nvidia was down more than 6%, Micron more than 12% and AMD more than 13%. Yahoo Finance said the morning’s decline erased about $2 trillion in market capitalization across stocks, reversing the previous session’s advances.
The CBOE Volatility Index, commonly called Wall Street’s fear gauge, surged more than 65% to as high as 27.45, according to the report. Strategist Shay Boloor of Futurum Equities described it as the index’s biggest one-day jump in more than two years. Oil moved higher as investors weighed whether President Donald Trump would pursue a deal with Iran to end the Middle East war. Brent crude traded around $97 a barrel and U.S. benchmark West Texas Intermediate near $90.
Chip Sell-Off Reverses Market Gains
The reversal matters because Wednesday’s rally had followed the Democrats’ sweeping victory in the midterm elections, as investors responded to the removal of election uncertainty. Thursday’s decline showed that the vote did not settle how markets will price the new political balance: investors are still weighing possible effects on AI investment, regulation and the wider economy.
The scale of losses in chip shares also made the session important beyond technology investors. Semiconductor companies are closely tied to expectations for AI infrastructure spending, and their sharp declines weighed on the broader indexes. The volatility spike signals a rapid change in market conditions, but it does not by itself establish how long the sell-off will last.
Oil’s rise added a separate source of uncertainty. Higher crude prices can affect expectations for energy costs and inflation, while the price movement reported Thursday reflected uncertainty about the war and the prospects for a U.S.-Iran agreement. The report did not establish that a policy change or a deal had occurred.
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From Election Rally to Reversal
U.S. markets rallied Wednesday after Democrats swept both chambers of Congress, according to Yahoo Finance’s account of the election response. That advance came as investors welcomed the end of election uncertainty, while beginning to assess what a change in control of Congress might mean for policy. Thursday’s sharp reversal erased those gains in the reported indexes.
Investors were also watching company news and economic signals. Qualcomm shares fell after its quarterly results, while AppLovin rose in premarket trading after reporting results and a fourth-quarter outlook above analyst expectations cited by Bloomberg estimates. Separately, Challenger, Gray & Christmas reported that announced layoff plans in October fell to their lowest level since 2023, as companies focused on retaining existing employees. The report pointed to Friday’s employment data as the next key labor-market release.
The reported market moves occurred alongside continuing debate about the election’s policy implications. Yahoo Finance said investors were assessing potential winners and losers from the change in control on Capitol Hill, including the effects on AI infrastructure spending and regulation.
Policy and Market Direction Remain Open
The available report does not establish what triggered the technology sell-off beyond describing renewed pressure on chip and AI-related shares and investor concerns about policy and spending. It is also unclear from the supplied figures where the indexes ultimately closed: the report describes losses at different points in the session, with its latest summary showing the steepest numbers.
It remains uncertain whether the volatility and losses will persist, whether the Nasdaq would finish the session in correction territory, or how investors will respond to further details about the incoming Congress’s policies. A possible U.S.-Iran deal was not confirmed. Yahoo Finance also reported that Gardner viewed the Clarity Act as unlikely to advance before year-end and a bipartisan compromise in the next Congress as unlikely; those are his assessments, not enacted policy or a legislative outcome.
Friday Jobs Data in Focus
Investors were looking ahead to the employment report scheduled for Friday, after Challenger, Gray & Christmas reported lower October layoff plans. The data may shape market expectations about employment and the economy, but its effect on stocks cannot be known in advance.
Markets will also continue to track chip and AI-related shares, oil prices and statements about the election’s policy consequences. The next clear measure of Thursday’s reversal will be the indexes’ closing levels and whether subsequent trading sustains or reverses the losses reported during the session.
Key Questions
How much did the major U.S. indexes fall?
Yahoo Finance’s latest figures in the supplied report put the Dow down 2.2%, the S&P 500 down 3.3% and the Nasdaq down 5%. Earlier updates in the same report showed smaller losses, reflecting different points during the session.
What drove the market decline?
The report linked the sell-off to renewed pressure on chip and AI-related shares and investor uncertainty about the policy and economic effects of the Democratic election victory. It did not identify a single confirmed trigger.
Why did semiconductor stocks fall?
Yahoo Finance reported that investors were weighing what the election result could mean for AI infrastructure spending and regulation, while chip stocks sold off broadly. The report does not establish one specific cause for the declines in individual companies.
Did the Nasdaq close in correction territory?
The report said the Nasdaq was on track to close in a correction after falling 5% in its latest figures. The supplied material does not give a final closing level or confirm that it finished there.
What market event was expected next?
Investors were watching Friday’s employment report, following a Challenger, Gray & Christmas update showing October layoff plans at their lowest level since 2023. The jobs report had not yet been released in the supplied account.
Source: finance.yahoo.com
