Stock Market Today: Nasdaq Sinks 4% as Investors Ditch Chip, Data-Center Stocks

The slide was led by a cascade of chip designers, memory makers and new‑cloud data‑center operators that had been riding the AI‑build‑out hype. Nvidia and Qualcomm each shed more than 9% of their market value, while smaller neoclouds such as CoreWeave fell double‑digit percentages in a single session.

Ballotpedia counted 41 local measures on the ballot aimed at restricting data‑center construction; only one in North Dakota survived. At the Wall Street Journal Tech conference, Meta’s Dina Powell McCormick warned that “building data centers is going to be harder” after the election, echoing a growing investor fear that a blue‑wave Congress will tighten zoning, environmental and labor rules that could stall new capacity for years.

The market’s reaction was immediate and broad. The PHLX Semiconductor Index fell 7.5%, its second straight day of losses, and the iShares Semiconductor ETF dropped 11%, on track for its worst day in six years. Qualcomm’s earnings beat expectations, but its forecast for the current quarter missed the street, with handset chip revenue down 26% as memory‑price pressures forced phone makers to raise prices.

Analysts tie the sell‑off to more than a political whiplash; they see a convergence of debt‑heavy AI capex, rising interest rates and a looming regulatory regime that could choke the capital pipeline. “The technology is still going to continue on in terms of its development, but if there is a slowdown in the actual development and the buildings and the infrastructure and so forth, that’s what stocks are going to trade off,” said Peter Boockvar, CIO at OnePoint BFG Wealth Partners. UBS strategists warned that “data‑center pauses will slow the pace of build‑out into 2028,” putting roughly 30% of capacity slated for that year at risk.

The next few weeks will reveal whether Thursday’s plunge is a short‑term risk‑off rally or the opening act of a longer‑term correction in AI‑related equities. Traders will watch for concrete legislative moves—such as the introduction of state‑level data‑center moratoria or federal budget allocations for AI research—to gauge how quickly the regulatory headwinds materialize. For now, the Nasdaq’s dip signals that investors are re‑pricing the “AI will change everything” narrative with a more sober view of political risk and capital constraints.