Wall Street Faces Major Setback: $2.5 Trillion Lost as Nasdaq Experiences Significant Decline
Wall Street experienced a significant selloff on Thursday, resulting in a staggering $2.5 trillion loss in market value in just one day. The decline was driven by investor concerns over heavy spending in artificial intelligence and the potential for stricter industry regulations. The Nasdaq Composite fell more than 5%, while the Dow Jones Industrial Average dropped 1,833 points, marking its worst single-day performance since April 2025.
Asian markets also felt the impact on Friday, with Japan’s Nikkei index sliding 6% and South Korea’s Kospi tumbling over 8% in early trading. Investors are reassessing popular AI-related trades amid indications that the sector may face increased scrutiny following the recent US midterm elections. This uncertainty has led to concerns about the pace of investment in AI and a potential slowdown in the expansion of data centers, affecting chipmakers and suppliers of related equipment.
The Nasdaq Composite’s 5.5% decline represents its worst session in 18 months, pushing the index more than 10% below its recent record high and placing it in correction territory. Nvidia, once the world’s largest company by market capitalization, saw its shares drop 9.3%, leaving them in negative territory for the year. Other tech stocks also suffered, with SanDisk plunging 22% and Western Digital losing 17%.
The broader US market reflected this weakness, with the Dow closing at 51,868 after a 1,833-point drop, or 3.4%. The S&P 500 fell between 4.3% and 4.4%, marking its steepest single-day decline since early April 2025. All 11 sectors of the S&P 500 ended lower, with seven sectors recording losses of at least 2%. Notable declines included Caterpillar, down 6.4%, and JPMorgan Chase, which fell 4.2%.
As equities plummeted, investors shifted towards safer assets, increasing demand for US government bonds. The yield on the benchmark 10-year Treasury note fell to its lowest level since September 9. Additionally, Wall Street’s VIX, known as the ‘fear index,’ surged 61%, reaching its highest level since the early weeks of the Iran war, indicating heightened market volatility.
