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Markets · · 3 min read

Chip Stocks Crash and the Post-Election Rally Unwinds. What Changed in 24 Hours

A day after the Dow's best session of the year, the Nasdaq fell more than 3% as semiconductor stocks plunged. Weak phone-chip results, a halted memory plant and political risk to data centres hit at once.

By the fnews.si editors

On Wednesday, the Dow rose 1,569 points, or 3%, its best day since April 2025, as investors welcomed divided government after the midterms. The S&P 500 gained 1.6% and the Nasdaq 1.4%.

By late morning Thursday, much of that was gone. As of about 10:30 a.m. ET, when this article was written, the Nasdaq Composite was down between 3.5% and 4%, the S&P 500 between 2% and 2.7%, and the Dow between 1% and 1.5%. The VIX, Wall Street’s “fear gauge,” had jumped about 30%. The damage was concentrated in one group: semiconductor stocks. The PHLX Semiconductor Index fell more than 5% early and kept falling.

Snapshots during the morning showed Micron down about 13%, Qualcomm about 10% to 11%, AMD about 9%, Nvidia about 8%, and Intel between 5% and 9%. In Asia, SK Hynix fell nearly 9.5% and Samsung Electronics more than 7.5%.

Three blows at once

No single piece of news explains a move this large. Three arrived together:

1. Phones are getting squeezed. Qualcomm and Arm reported results after Wednesday’s close, and both pointed to weakness in smartphones. Qualcomm’s handset chip revenue fell 26% from a year earlier, and it blamed industry-wide memory shortages. We look at that in a separate article. For memory makers, the read-through is uncomfortable: if expensive memory is cutting phone production, it eventually cuts demand for memory too.

2. A memory plant stalled. Micron has largely halted work on a $4.5 billion memory plant in Taiwan after a labour dispute with a local union, according to Bloomberg. That added to the pressure on a stock that had already fallen 7% on Wednesday.

3. Political risk to data centres. The Democratic sweep included governors’ races in Texas, Ohio and Georgia, where candidates campaigned on pausing data-centre construction. On Wednesday, investors sold the data-centre operators most directly exposed. On Thursday, the worry spread to the companies that sell them chips.

Why chip stocks fell so far

Semiconductor stocks have been this year’s biggest winners. Micron was trading near $800 a share and AMD had more than doubled. Stocks that have risen that much are owned by many investors who are sitting on large gains, and who are quick to sell when the story wobbles.

There’s also a shift in the narrative. For most of 2026, the question about AI was how fast demand would grow. In the past two weeks, investors have seen Big Tech’s cash flow strained, memory costs squeezing device makers, and now voters in key states turning against data centres. None of that means demand is falling. AMD said on Tuesday that its AI business is growing faster than it expected. But it means the risks are getting more attention than they were a month ago.

Not everything fell

The selling was targeted, not general:

  • AppLovin jumped more than 20% after reporting revenue up 55% and raising its forecast.
  • Toyota’s US-listed shares rose almost 10%.
  • Bonds rallied, with the 10-year Treasury yield slipping to about 4.86%.
  • The Dow, with fewer chip stocks, held up far better than the Nasdaq.

That’s a reminder that a “market sell-off” is often a sell-off in one area, with money moving elsewhere rather than leaving stocks entirely. We described a similar rotation earlier this week.

What to keep in mind

Large one-day drops in popular stocks are unsettling, but they aren’t unusual for a sector that has risen this much. A few points help put them in context:

  • Concentration risk is real. Many index funds now hold a large share of their value in a handful of tech and chip companies. A day like this hits them harder than investors might expect.
  • Volatility cuts both ways. Chip stocks that fell 10% in a day have often risen 10% in a day too. Selling after a large drop locks in the loss.
  • Watch the fundamentals, not the price. The question that matters is whether AI demand, memory prices and data-centre construction hold up over the coming quarters. Friday’s jobs report and the next inflation data will also shape the interest-rate outlook, which matters a lot for highly valued stocks.

All figures are as of late morning ET on November 5. Intraday prices can change sharply before the close, and the session still had hours to run.