Nasdaq Slides Into Correction as Investors Pull Back From AI Stocks
On Nov. 5, 2026, the Nasdaq Composite fell more than 4% as investors retreated from the AI trade after the election, according to The Wall Street Journal's live coverage. Intraday, the index dropped as much as 5.5% during Thursday trading, CNN reported, and it fell into correction territory. A correction is conventionally a decline of 10% or more from a recent peak.
Semiconductors bore the heaviest pressure. The PHLX Semiconductor Index (SOX), a benchmark that tracks a basket of chip stocks, fell 12% over three days around the post-election selloff, according to Charles Schwab. Reuters reported that chipmakers were tumbling and that the Nasdaq looked set to confirm a correction. The WSJ said the chip-stock selloff intensified on Nov. 5.
The broader tech complex fared no better. The WSJ reported that the so-called Magnificent Seven, the group of largest technology megacaps, lost $1 trillion in market value during the session. Trump Media's share price was 25% lower on the week as of 11:37 a.m. ET, the WSJ also reported.
The move in the major indexes was considerably smaller than the Nasdaq's. CNBC reported that the Dow slid 1,000 points on Nov. 5 as traders dumped tech stocks, after gaining 1,569.40 points, or 3.03%, on Nov. 4 to close at 53,356.12. The S&P 500 added 1.58% on Nov. 4 to close at 7,688.62, according to the same CNBC coverage. Schwab noted that the S&P 500 was only 3% off its high despite the reversal in AI stocks. FRED's S&P 500 series recorded 7,580.07 on Oct. 30, 7,541.40 on Nov. 2 and 7,568.92 on Nov. 3, so the index had climbed roughly 1.5% over the four sessions before the Nov. 4 gain.
Rates moved in the opposite direction of equities. A bond rally drove the 10-year Treasury yield to a two-month low on Nov. 5, per the WSJ. Bond prices and yields move inversely, so a yield falling to a two-month low means bond prices rose to a two-month high.
In my view, the figures point to a rotation within the index more than a broad exit from equities. The Nasdaq's drawdown reflects concentrated exposure to a small group of AI-linked names, where semiconductor weakness passes quickly into hyperscaler and software valuation multiples. The S&P 500's more modest decline suggests that capital did not leave the market as a whole. Whether the bond rally reflects a shift toward duration, meaning longer-dated bonds, or simply a repricing of growth expectations is a question the session's data alone does not settle. Readers weighing the move should watch whether yields and semiconductor leadership move together in the sessions that follow.
The broader context here is that a sharp drawdown in the most richly valued part of the market can also reset positioning. For infrastructure engineers and chip designers, the more useful signal is whether demand for accelerators and inference capacity holds up once the price action settles. A selloff of this kind tests conviction in the trade, but it does not by itself alter the technical roadmaps those companies are executing.
