NEW YORK (AP) — A brutal sell-off swept through Wall Street Thursday, led by stocks tied to the buildout of AI data centers. The wipeout more than erased the U.S. stock market’s gain from the day before, which was its best in three months.
The S&P 500 fell 4.4% for its worst day since President Donald Trump shook markets worldwide in April 2025 with his “Liberation Day” tariffs. The Dow Jones Industrial Average sank 1,833 points, or 3.4%, while the Nasdaq composite tumbled 5.5%.
The Nasdaq, which is full of AI-related and other tech stocks, sank 11.9% below its all-time high set last month. Stock geeks call a loss of more than 10% a “correction.”
Stock markets around the world felt pressure from continued drops for companies that had benefited from the boom in the artificial-intelligence technology industry, and South Korea’s Kospi index tumbled 5.3%. Such stocks have been swinging for months on worries that the construction of further AI data centers may slow because of how expensive it’s become to borrow money. Critics also said AI stock prices had shot too high and were in a bubble.
Tuesday’s U.S. midterm elections added another challenge. The nationwide victories for Democrats raised the possibility that governments could force pauses in construction of more data centers. Voters across political parties say they’re wary about AI and don’t like the increases to power bills caused by data centers.
Any slowdown in construction of AI data centers would mean fewer purchases of AI chips, not to mention electricity and other products and services that are getting vacuumed up in the AI frenzy, which is driving much of the U.S. economy’s growth.