Tech stocks slide sharply as Magnificent Seven shed more than $1 trillion
A broad U.S. market sell-off on Thursday wipes out the prior session's postelection gains as investor concerns over a slowdown in artificial intelligence buildout hit major indexes. The Nasdaq Composite falls more than 5% into correction territory, while the S&P 500, Dow Jones Industrial Average and Russell 2000 also post steep losses.
Highlights
- Nasdaq Composite drops over 5% and S&P 500 posts its steepest single-day decline since April 4, 2025, amid broad market fears around AI spending.
- Magnificent Seven lose over $1 trillion in market value as Nvidia falls more than 9%, erasing 2024 gains and closing down 2.6% year to date.
- All 11 S&P 500 sectors finish negative, with information technology dropping 7.30% and XLK ETF sliding 8.04%, both posting their worst days since March 16, 2020.
Market rout and record declines
As reported by CNBC, Thursday's sell-off produces the worst one-day drop for several major U.S. indexes since April 4, 2025, underscoring how fears around AI-related spending are spilling across the wider equity market.The Nasdaq Composite records its weakest daily performance since that date, falling more than 5%. The S&P 500 also posts its worst single-day decline since April 4, 2025, while the Dow Jones Industrial Average retreats more than 1,800 points, or more than 3%, in its steepest drop since the same session.
The damage is especially severe among the so-called Magnificent Seven group, which loses more than $1 trillion in combined market value. Nvidia leads the decline with a loss of more than $440 billion, while its shares fall more than 9% and move into negative territory for the year, leaving the stock down 2.6% year to date.
Pressure spreads across sectors
Market weakness is not limited to a handful of large technology names. On the New York Stock Exchange, declining stocks outnumber advancing issues by 2,344 to 416, or nearly 6 to 1, showing the breadth of the retreat.All 11 sectors in the S&P 500 finish in negative territory, led by information technology, which drops 7.30% for its worst daily performance since March 16, 2020. The Technology Select Sector SPDR Fund, known by its ticker XLK, falls 8.04%, marking its weakest day since March 16, 2020, when it lost 13.81%.
In our earlier article on the AI-linked tech sell-off, we noted that pressure spread across semiconductors, data-center infrastructure plays and other companies tied to AI buildouts as investors reassessed whether projected revenues can justify massive spending. The pullback was compounded by a jump in oil prices that revived inflation concerns and raised the risk of tighter-for-longer Fed policy, adding to broader market caution and volatility expectations.
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