Nasdaq set for biggest daily drop in 19 months on fears of AI regulations
SPY•The Nasdaq Composite fell 5.1%, on track for its biggest daily drop in 19 months, as chipmakers and other technology stocks slid on fears that tighter AI regulation could slow infrastructure growth. The Nasdaq 100 fell 5.2%, erasing $2 trillion in market value.
1. AI regulation fears hit stocks
The Nasdaq Composite tumbled Thursday, with the index on track to confirm a correction after falling 10% from its October 6 record-high close. Investors worried that Democratic election wins could lead to tighter regulation and slow the AI infrastructure buildout.
2. Technology stocks slide
Nvidia fell almost 9%, and the Philadelphia Semiconductor index dropped more than 10%. Meta Platforms fell 4.2%, Amazon.com declined 2.7% and Alphabet lost 1.9%. Qualcomm dropped 10% after missing estimates for fourth-quarter smartphone chip sales.
3. Broader market declines
The S&P 500 fell 4.0%, the Nasdaq Composite dropped 5.1% and the Dow Jones Industrial Average declined 3.1%. Cleveland Federal Reserve President Beth Hammack and Richmond Fed chief Thomas Barkin hinted at the possibility of future rate hikes, while investors looked ahead to Friday’s October US jobs report.
