U.S. stocks tumbled on Thursday, with the Nasdaq Composite falling more than 3% in morning trading and moving toward correction territory as chipmakers and data-center stocks led a broad selloff, Reuters reported.
At 9:57 a.m. ET, the Nasdaq was down 795 points, or 3.09%, at 24,941.44, after falling nearly 4% earlier in the session to 24,712.60. That put the index more than 10% below its October 6 record close of 27,599.89 — a decline that would confirm a correction if it holds through the close. The S&P 500 fell 1.66% to 7,560.88 and the Dow Jones Industrial Average lost 0.66% to 53,004.25.
Chip stocks were the epicenter of the rout. By late morning, AMD had fallen about 14%, Micron about 12% and SanDisk about 20%, while Nvidia dropped roughly 7%, Qualcomm about 10% after a disappointing smartphone outlook, Intel about 8% and Broadcom about 7%. The PHLX Semiconductor Index was down more than 7%, and Bitcoin slipped below $77,000.
Investors are worried that the new Democratic Congress will slow data-center construction and tighten regulation of artificial intelligence, while big technology companies borrow heavily to fund chips and data centers and investors question how quickly that spending turns into profit, Reuters reported. Weak results from Qualcomm and expectations of another Federal Reserve rate hike added to the pressure.
The selloff erased much of Wednesday's post-election rally, when the Dow surged more than 1,500 points, or about 3%, and the S&P 500 rose 1.6% as oil prices tumbled. The session was still open at midday, so the closing figures could still move.
