Summary
- The Nasdaq Composite dropped 5.5% to 24,314.99, extending a correction in tech shares.
- The S&P 500 fell 4.36% to 7,353.73, well off its 52-week high of 7,844.52.
- The Dow Jones Industrial Average lost 3.44%, closing at 51,523.06.
The Nasdaq's decline marked its steepest single-session drop in roughly a year and a half, dragging the index firmly into correction territory after a prolonged run higher driven largely by artificial intelligence-related stocks. The S&P 500 and Dow also posted sharp losses, with all three major indexes falling well below recent highs reached earlier this year.
The sell-off was concentrated in the so-called Magnificent Seven group of megacap technology companies, which together shed roughly $1 trillion in market value in a single trading day. The losses rippled overnight into Asian markets, where chipmakers including SK Hynix, Samsung and TSMC, along with Japan's Softbank, posted steep declines as investors reassessed valuations across the global semiconductor and AI supply chain.
The scale of the retreat reflects growing investor unease over how much of the AI investment boom has already been priced into technology shares. After months of gains tied to expectations around data center buildouts and chip demand, the abrupt reversal suggests traders are now weighing the risk that earnings and spending plans may not keep pace with lofty valuations.
The Nasdaq remains more than 3,400 points below its 52-week high of 27,722.75, while the S&P 500 and Dow are similarly well off their respective peaks of 7,844.52 and 54,744.33. All three indexes, however, remain above their 52-week lows, underscoring that Thursday's rout, while severe, has not erased the broader gains accumulated over the past year.
Attention now turns to how markets digest incoming economic data and whether the selling pressure extends into the following session. Futures tied to major US indexes pointed modestly higher ahead of the next trading day, suggesting some investors view the decline as an overdue correction rather than the start of a sustained downturn. Still, the severity and speed of the drop have rattled sentiment heading into a period of heightened scrutiny over AI-related spending and valuations across both US and Asian markets.