Wall Street Suffers Historic Selloff as Artificial Intelligence Stocks Plunge

Wall Street suffered a severe broad selloff on Thursday as technology stocks plummeted due to mounting concerns over artificial intelligence spending and potential stricter industry regulations following the midterm elections.

The Nasdaq Composite plunged 5.5 percent in its worst session in 18 months, while the Dow Jones Industrial Average fell 3.4 percent or 1,833 points, and the S&P 500 dropped 4.4 percent.

The sudden market downturn wiped out trillions of dollars in value just one day after a powerful post-election rally that had been driven by Democratic victories in both chambers of Congress.

Chipmakers and artificial intelligence infrastructure companies sustained the heaviest losses as investors questioned whether valuations had climbed too high.

Nvidia lost 9.3 percent, while Advanced Micro Devices fell 17.3 percent and Micron Technology dropped 17.5 percent, according to NDTV.

The Times of India reported that memory maker SanDisk plunged 22 percent and hard drive manufacturer Western Digital lost 17 percent.

Yahoo Finance reported that SanDisk, Western Digital, Seagate, and Micron all suffered steep double-digit losses.

The political shift in Washington also introduced new uncertainty regarding the massive data center build-out required for artificial intelligence expansion.

Democratic candidates had campaigned against the rapid expansion of artificial intelligence data centers, citing environmental impacts, electricity consumption, and rising local costs.

Investors began pricing in potential regulatory hurdles that could slow down infrastructure investment and pressure companies supplying power and equipment to the sector.

The market volatility spread globally, causing declines in Asian markets on Friday, with Japan's Nikkei sliding 6 percent and South Korea's Kospi tumbling more than 8 percent.

Safe-haven demand simultaneously drove down the yield on the benchmark 10-year Treasury note to its lowest level since September 9.

Markets will look to the October jobs report on Friday for their next major indicator on the health of the broader economy.