The S&P 500 fell 4.4% on Thursday 5 November 2026. A selloff in AI chip and data center stocks drove the fall, one day after the midterm result lifted the market. It was the index's worst day since April 2025. The Nasdaq Composite fell 5.5% and closed in a correction, which means a fall of 10% or more from a record.
This guide covers the week day by day, the midterm link to the AI trade, the stocks that fell and rose, four earlier episodes of 4% falls, plus analyst views. Index levels are closing levels for 5 November 2026.
Why did the stock market fall today? AI chip and data center stocks sold off after Democrats won control of Congress. That raised the risk of new limits on data center building.
The S&P 500 closed at 7,353.73 (down 4.4%), the Dow Jones Industrial Average at 51,523.06 (down 3.4%), and the Nasdaq Composite at 24,315.00 (down 5.5%).
The Philadelphia Semiconductor Index, a basket of chip makers, fell 12.3%.
The S&P 500 gave back all of Wednesday's gain. It closed 3.0% below its 30 October level.
What happened to the stock market on 5 November 2026?
S&P 500: 7,353.73, down 334.89 points (4.4%).
Dow Jones Industrial Average: 51,523.06, down 1,833.06 points (3.4%).
Nasdaq Composite: 24,315.00, down 1,421.52 points (5.5%).
Russell 2000, an index of smaller companies: 2,729.89, down 127.06 points (4.5%).
Philadelphia Semiconductor Index: 9,011.14, down 1,257.52 points (12.3%).
The S&P 500 had lost more than $2 trillion of market value by late morning. It closed 5.9% below its 6 October record. The Nasdaq Composite closed 11.9% below its 6 October record.
On the second day after a midterm Election Day, the S&P 500 fell more than in any such case in data going back nearly a century. The previous low was a fall of about 2.3% in 2002.
The 10-year Treasury yield closed near 4.84%. West Texas Intermediate (WTI) crude rose about 3% to roughly $91 a barrel after Wednesday's 8% fall.
Why did the stock market fall today?
1. The midterm result hit the AI buildout. The AI buildout is the spending on chips and data centers that runs AI software. Democrats won both the House and the Senate. Senator Bernie Sanders has called for a national moratorium on new data centers.
Chip makers, memory makers, networking firms, and data center operators sell into that building, so any limit lowers their expected sales. Strategists at the Swiss bank UBS put about 30% of the US data center capacity additions expected in 2028 at risk, according to Reuters.
2. Doubts about AI spending were already building. Chip stocks were falling before the election. More than $1 trillion of tech market value disappeared on 30 October over those doubts.
3. Year-end profit-taking added to the selling. The analyst views below describe hedge funds locking in 2026 gains.
How did the week lead up to the fall?
Source: YX Insights price data
The chart indexes each close to 100 on Friday 30 October. By Thursday, the S&P 500 stood at 97.0, the Nasdaq Composite at 95.6, and the Dow at 99.5.
Friday 30 October: Intel fell 29%. More than $1 trillion of tech market value disappeared over doubts about AI spending.
Monday 2 November: The Nasdaq fell 1.1% and the S&P 500 fell 0.5%. Marvell dropped 13% after announcing an all-stock acquisition. Oracle fell almost 9% after plans to sell $20 billion of debt and stock.
Tuesday 3 November: Election Day. The S&P 500 rose 0.4% and the Nasdaq 0.8%.
Wednesday 4 November: Democrats won both chambers. The Dow rose 1,569 points (3%) to 53,356.12, its best post-midterm day since 1982. Oil fell about 8%. Treasury yields eased.
Thursday 5 November: The S&P 500 gave back more than two days of gains. The Cboe Volatility Index, which measures expected stock market swings over the next 30 days, jumped to 28.18 from 16.61.
How did the midterm elections move the stock market?
On Wednesday, the S&P 500 rose 1.6% and the Dow rose 3%. Oil fell about 8% on hopes for talks to end the US-Iran war. Microsoft rose 6.7% and Amazon rose 6.1%.
On Thursday, chip makers fell far more than the hyperscalers, the large cloud companies that buy their chips. Microsoft still fell 3.6% and Amazon 2.2%.
Where did the money go before Thursday?
A rotation is money moving out of one group of stocks and into others. For most of the week, money moved out of AI chip stocks. On Monday, the equal-weight S&P 500, which gives every company the same weight, rose 0.73% while the regular index fell. On Wednesday, Consumer Discretionary rose 4.3%, Financials rose 3.5%, and Real Estate rose 3.2%, while Energy fell 4.8% with oil.
On Thursday, the rotation stopped. All 11 S&P 500 sectors were lower by early afternoon, with technology falling most.
Which stocks fell the most today?
Chip and AI infrastructure stocks led the declines. Chart 2 shows nine selected closing falls among them.
Source: YX Insights price data
Nvidia closed at $181.60, below its 31 December close of $186.50. It has given back its 2026 gain.
Outside AI, company news drove the largest losses. Veracyte fell 54% after lowering its testing revenue forecast. Tripadvisor fell 28% after management departures.
Which stocks rose today?
A short list of companies with strong results or forecasts rose despite the market.
Source: YX Insights price data
AppLovin rose 31% after it beat profit estimates. Krispy Kreme rose 31% after it raised its revenue forecast.
Has the S&P 500 fallen like this before?
Four earlier episodes since June 2020 saw the S&P 500 fall 4% or more in a day. Each is counted from its first day: 11 June 2020, 18 May 2022, 13 September 2022, and 3 April 2025. The 2025 fall continued on 4 April, with a further 6.0% drop. Chart 4 shows what the S&P 500 and the Nasdaq 100, an index of the 100 largest non-financial Nasdaq companies, did over the next three months.
Source: YX Insights price data
The S&P 500 rose over the next three months after all four days. The Nasdaq 100 rose after three and fell 1.7% after 13 September 2022. The table adds the further low and the 12-month returns.
Day of the fall | S&P 500 that day | Lowest close in the next 3 months | S&P 500 after 12 months | Nasdaq 100 after 12 months |
|---|---|---|---|---|
11 June 2020 | −5.9% | None | +41.5% | +46.0% |
18 May 2022 | −4.0% | −6.5% | +7.0% | +16.0% |
13 September 2022 | −4.3% | −9.0% | +13.6% | +27.5% |
3 April 2025 | −4.8% | −7.7% | +22.5% | +30.6% |
Source: YX Insights price data. The lowest close is measured against the S&P 500 close on the day of the fall.
In three of the four cases, the S&P 500 fell further within three months before it recovered. The 12-month returns were positive in all four. Four cases are too few to forecast the next one.
What are analysts saying about the selloff?
Profit-taking: Charlie McElligott, a strategist at the bank Nomura, said the selling reflects hedge funds locking in 2026 gains, with no sudden deterioration in fundamentals.
Retail selling: Viraj Patel of Vanda Research called the retail selling a total capitulation.
Spreading losses: Keith Lerner, chief investment officer at Truist Wealth, said the size of the tech selloff is now feeding into the broader market.
What is scheduled next?
The October jobs report is due on Friday 6 November. Our guide to how to read the jobs report explains each line. Initial jobless claims fell to 189,000 this week. Third-quarter productivity rose 3.6%.
The Federal Reserve held the Fed Funds Rate at 3.75% to 4% on 28 October in a 10 to 2 vote, with two members voting for a rise.
Fed Funds Futures put the chance of a December rise at 70.1% on Thursday afternoon, down from 82.7% on Wednesday, according to the CME Group's FedWatch tool. Our guide to the Fed Funds Rate explains how the Fed sets it.
The S&P 500 fell because a political result threatened AI spending. Friday's jobs report is the next scheduled data point.
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Frequently asked questions
What caused the stock market selloff on 5 November 2026?
A selloff in AI chip and data center stocks drove the fall. The Democratic win in the midterms raised the chance of limits on data centers. The selling followed weeks of doubt about AI spending.
How much did the S&P 500 fall on 5 November 2026?
It fell 334.89 points, or 4.4%, to 7,353.73. That was its worst day since April 2025. The Nasdaq Composite fell 5.5%. The Dow Jones Industrial Average fell 3.4%. The S&P 500 also closed 5.9% below its 6 October record.
Is the Nasdaq in a correction?
Yes. The Nasdaq Composite closed 11.9% below its 6 October record. A correction is a fall of 10% or more from a record close.
What is the VIX?
The Cboe Volatility Index, or VIX, measures expected stock market swings over the next 30 days. It rose to 28.18 on Thursday from 16.61 on Wednesday.
Will the stock market recover?
We cannot say. Wednesday's gain lasted one session. After four earlier episodes of 4% falls, the S&P 500 was higher 12 months later each time. It fell further first in three of the four cases. Friday's jobs report is the next scheduled data point.
DISCLAIMER: This article is intended for educational purposes only. Any information or analysis in this note does not constitute an offer to sell or a solicitation of an offer to buy any securities. Nothing in this note is intended to be investment advice, nor should it be relied upon to make investment decisions. Any opinions, analyses, or probabilities expressed in this note are those of the author as of the note's date of publication and are subject to change without notice.
