Blue tsunami wipes out $2.5 trillion from Nasdaq as investors fret about AI trade
SPY•The Nasdaq 100 fell 6.4%, erasing $2.5 trillion in market value, while the Nasdaq Composite dropped 5.5% as investors worried a Democratic congressional sweep could slow data center construction. The Philadelphia Semiconductor index fell 12%, and CoreWeave’s five-year credit default swap spreads reached a record 1,267.9 basis points.
1. Nasdaq selloff deepens
The Nasdaq Composite fell 5.5% on Thursday, its deepest one-day decline since April 2025, as investors feared a Democratic sweep in Congress could bring more scrutiny of AI and stall data center expansion. The index has lost nearly 12% from its October 6 record close, entering correction territory.
2. Chips and AI infrastructure slide
The Nasdaq 100 fell 6.4%, wiping out $2.5 trillion in market value. The Philadelphia Semiconductor index dropped 12% to its lowest level in more than six months; Nvidia fell 9% and Advanced Micro Devices slumped 17%. Around 30% of expected US data center capacity additions in 2028 could be at risk from potential construction pauses, UBS analysts estimated.
3. Credit worries rise
CoreWeave fell 10%, and its five-year credit default swap spreads widened to a record 1,267.9 basis points. Nebius dropped 15%, while Intel’s five-year credit default swap spreads also reached a record, at 149.7 basis points. Amazon.com and Alphabet each slid 2.2%.
