Nvidia and AI giants lead S&P 500 to worst day since April
The Nasdaq dropped 11% from its peak as investors reacted to data center costs and election results.
By Justin Barnes ·
U.S. stock investors lost money Thursday as a sharp decline in artificial intelligence shares dragged down the broader market. The S&P 500 index fell 3.6%, marking its steepest drop since President Donald Trump announced his tariffs in April 2025. The Dow Jones Industrial Average lost 1,533 points, or 2.9%, with an hour left in trading. The Nasdaq composite, which is heavy on technology stocks, fell 4.5%.
The Nasdaq now sits 11% below its all-time high set last month. Financial analysts refer to a decline of more than 10% from a peak as a correction. The selling pressure extended to global markets, where South Korea’s Kospi index dropped 5.3% and Japan’s Nikkei 225 fell 1.8%. These moves reflect growing worry that the cost of building AI data centers is becoming too high.
Tuesday’s midterm elections added to the uncertainty. Democrats won key races, raising the possibility that future governments might pause construction on new data centers. Voters across party lines have expressed concern about rising electric bills linked to these facilities. If construction slows, companies will buy fewer chips, power, and other goods that currently drive a large part of U.S. economic growth.
Nvidia, the primary supplier of AI chips, led the decline. Its stock fell 8%, following a 3.2% drop the day before. Because Nvidia is one of the largest companies in the S&P 500, its price movements have an outsized effect on the index. Advanced Micro Devices tumbled 14%, while CoreWeave, a cloud provider for AI chips, fell 8.9%. GE Vernova, which helps power data centers, sank 6.9%.
A few stocks bucked the trend. AppLovin jumped 29.4% after reporting higher revenue and profit than analysts expected. The company also approved a buyback program worth up to $3.2 billion, bringing its total potential repurchase value to $3.6 billion. Tapestry, the parent company of Coach and Kate Spade, rose 7.4% after posting stronger earnings and raising its forecasts for the fiscal year.
Outside the stock market, oil prices recovered. A barrel of Brent crude rose 3.9% to $98.29, regaining ground after a nearly 9% drop the previous day. In the bond market, the yield on the 10-year Treasury fell to 4.83% from 4.90% late Wednesday. It stood above 5.30% just last month. This shift suggests investors are moving into government bonds for safety.
The drop occurred despite positive economic data. Fewer U.S. workers applied for unemployment benefits last week, and reports indicated that summer productivity improved more than economists predicted. These signs suggest the economy can grow without adding excessive pressure to inflation.
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