The Nasdaq Composite plummeted on Thursday, erasing the sharp gains from the previous session, as investors accelerated their move away from technology stocks in the wake of the U.S. midterm elections.

The tech-heavy Nasdaq declined 3.9% and dipped into correction territory, trading more than 10% below a record set last month. The S&P 500 was down 2.8%. The Dow Jones Industrial Average shed 1,153 points, or 2.2%, as gains in stocks such as Chevron and Johnson & Johnson were not enough to spare the 30-stock index from the tech selling spree. The Dow erased most of its advance from Wednesday’s massive postelection rally.

Stocks related to the artificial intelligence trade — particularly those linked to the chips industry and data centers — slid for a second day. Investors fear that a Democratic sweep of both chambers of Congress as well as victories in key gubernatorial races could spell a slowdown of the data center buildout.

Chipmakers Broadcom and Nvidia each fell 6% Thursday, as did others such as software stock Oracle. Another chip stock, Qualcomm, reported earnings that beat estimates, but the stock dropped 11% on a weaker-than-expected earnings outlook. The iShares Semiconductor ETF (SOXX) was down 11% at one point, which would be its worst day since the Covid-19 breakout of March 2020.

Additionally, Elon Musk’s Tesla and SpaceX dropped 9% and 7%, respectively.

Shares of neocloud companies also retreated, with CoreWeave losing 9%, Nebius sliding 13% and Iren shedding 14%, amid those worries about a backlash to the industry in light of the election results in various states.

Investors are “stepping away until they get a better sense of the implications of the midterms around the AI capex cycle in particular, which is the biggest economic tailwind we’ve had going for us for the last, call it, three years,” said Tim Holland, chief investment officer at Orion. “It’s about tone and tenor from the party that did really well, incredibly well, at the federal level and at the state level.”

On Wednesday, the Dow jumped more than 1,500 points to notch its best day since April 2025 after a decisive midterm win for Democrats. The S&P 500 and Nasdaq Composite also popped more than 1% each. Areas related to AI were under pressure, however, while economically-sensitive stocks rose.