Highlights
Stocks tanked Thursday to more than wipe out Wednesday’s post-election gains in a broad risk-off move paced by technology and AI shares. The Dow Jones industrial average lost 3.4 percent, the S&P 500 plunged 4.4 percent and the Nasdaq dropped 5.5 percent. Bond yields dropped in the flight from risky assets into US Treasuries while the dollar index edged up and oil prices surged.
AI stocks led the selloff amid worries that the trade has been overdone, aggravated by concerns that the Democratic sweep will curb data centers and pose problematic capacity limits in the AI buildout needed for the AI trade to pan out. Nvidia and other AI leaders saw near double-digit percentage losses on the day. Rising oil prices posed another big problem for the market.
Magnificent Seven stocks had a bad day with Tesla and Nvidia leading the way down along with chipmakers generally plus most tech sectors, auto suppliers, banks, airlines, metals and retail/apparel. The only sectors holding up relatively well on the day were defensive plays including consumer staples, pharma, managed care, telecom, and energy.