Deep chip selloff drags global stocks lower on AI spending concerns
SMH•Global stocks fell sharply as semiconductor shares sold off on weak Qualcomm earnings and concerns that a Democrat-controlled Congress could slow AI infrastructure investment. The Philadelphia Semiconductor Index dropped 12.2%, its biggest one-day fall since April 2025, while the Dow fell 3.4%, the S&P 500 4.4% and the Nasdaq 5.5%.
1. Chip stocks lead declines
The Philadelphia Semiconductor Index slumped 12.2%, its biggest one-day drop since April 2025. Qualcomm shares fell 9.5% after smartphone chip sales missed Wall Street estimates, while Nvidia shed 9.3%. The Nasdaq confirmed a correction from its record closing high.
2. AI spending concerns
Investors were concerned that a Democrat-controlled US Congress could slow investment in AI infrastructure. Candidates opposing data centre expansion won in Texas and Georgia. Mark Hackett, chief market strategist at Nationwide, said disappointing earnings and the possibility of a slowdown in AI development were weighing on sentiment.
3. Oil and bonds
Brent crude rose 3.88% to settle at $98.29 a barrel. The yield on 10-year US Treasury notes fell 5.73 basis points to 4.835%, while the dollar edged higher.
