One day after its best session in three months, the market gave it all back and then some. The S&P 500 fell 4.4% on Thursday, its worst day since the April 2025 “Liberation Day” tariff shock, and the damage landed almost entirely on the companies building the AI economy.
The numbers, as reported by the Associated Press and CBC, are ugly. The S&P 500 dropped 334.89 points to 7,353.73. The Dow lost 1,833 points, or 3.4%, to 51,523.06. The Nasdaq Composite sank 5.5% to 24,315.00, leaving it 11.9% below its record high from last month. That is technical correction territory. Canada’s main index lost 736 points, and South Korea’s Kospi fell 5.3%, so this was not just a Wall Street problem.
The individual moves tell the story. Nvidia fell 9.3% and is now down 2.6% for 2026, after gains of roughly 39%, 171% and 239% in the previous three years. AMD tumbled 17.3%. CoreWeave, which rents out AI chips through the cloud, lost 9.8%. GE Vernova, which supplies power gear to data centres, dropped 7.5%. If you sell picks and shovels for AI infrastructure, it was a bad day to own your stock.
Index weight makes this worse. Nvidia is so large that a 1% move in its shares shifts the S&P 500 more than a 1% move in almost any other company. When the biggest names fall together, the whole index goes with them. That is the concentration risk people have warned about for two years, now showing up in real time.
So what triggered it? Two things, both about the same question: will the data centre build-out keep going at this pace? Stocks have been swinging for months on worries that borrowing costs make new facilities too expensive. Critics have also called AI valuations a bubble for a while. Then Tuesday’s midterm elections added a political layer. Democratic wins raised the odds that governments could force pauses on new data centres. Voters of all parties say they distrust AI and dislike the power bill increases tied to these facilities.
That matters because the whole chain depends on construction. Fewer data centres means fewer chip orders for Nvidia and AMD, less demand for electricity and cooling equipment, and less rental business for neoclouds like CoreWeave. AI spending is driving a big share of U.S. economic growth, so a slowdown would not stay inside the tech sector.
A few stocks went the other way. AppLovin jumped 31% after beating revenue and profit estimates and expanding its buyback by $3.2 billion US. Tapestry, the Coach and Kate Spade owner, rose 7.1% after a profit beat and a higher outlook. Strong earnings still get rewarded, which suggests this was about AI sentiment and not a market-wide collapse in fundamentals.
Elsewhere, Brent crude rose 3.9% to $98.29 US, recovering part of the previous day’s nearly 9% drop, with the war in Iran still clouding the energy outlook. The 10-year Treasury yield fell to 4.84%, down from above 5.30% last month, a sign investors are buying safer assets.
Is this noise or a turning point? One day does not make a bust, and Nvidia’s 2026 loss is small next to its recent run. But the argument has changed. The bear case used to be about valuation and interest rates. Now it includes regulation and public opinion, which are harder to model. For developers and founders who depend on cheap, abundant compute, watch whether policy talk about data centre limits turns into actual rules. That would matter far more than any single bad session.
