Dow Falls 1,631 Points as Nasdaq Enters Correction

The Nasdaq Composite fell 5.2% on Thursday, a decline that moved the technology-heavy index more than 10% below its record high set on Oct. 6. This drop pushed the index into correction territory, a level defined by a decline of at least 10% from peak values. The S&P 500 also declined sharply, losing 3.9% in its steepest single-day drop since April 2025.

The Dow Jones Industrial Average mirrored the broad market weakness, tumbling 1,631 points. This represents a 3.1% loss for the blue-chip benchmark. These Thursday losses erased much of the gains investors captured during Wednesday's rally. That previous session saw the Dow rise 1,569 points, or 3%, following the midterm elections held on Tuesday.

Democrats secured control of both chambers of Congress in Tuesday's vote. Investors initially viewed this political shift positively, driving a post-election surge. However, sentiment reversed quickly as traders weighed the potential impact of the new political alignment on corporate policy. Concerns focused specifically on the technology sector and major infrastructure projects.

Semiconductor and AI stocks led the Thursday selloff. Shares of Advanced Micro Devices plunged 15.5% as investors reassessed the outlook for artificial intelligence infrastructure expansion. Nvidia shares dropped 8.7% during the same period. Qualcomm also faced selling pressure after reporting fourth-quarter smartphone chip sales that missed market expectations.

Traders grew wary that Democratic lawmakers and newly elected state officials might impose stricter regulations on data center construction. This scrutiny is particularly relevant in states like Texas, which has become a major hub for the industry. Beyond specific equity factors, macroeconomic indicators continue to influence trading desks.

Market participants are closely monitoring federal monetary guidance and labor statistical reports scheduled for release later this week. Fluctuations in energy markets and treasury yields have added to prevailing volatility. Analysts note that such sharp turnarounds are common as initial relief rallies give way to fundamental economic assessments.