AI sell-off sends S&P 500 down 4.4%, worst day since April 2025

Wall Street suffered its worst day in more than a year on Thursday as a sell-off in stocks tied to artificial intelligence swept through the market. The S&P 500 fell 4.4% to 7,353.73, its steepest one-day drop since April 2025, when President Donald Trump's sweeping tariffs rattled markets worldwide.

The Dow Jones Industrial Average lost 1,833 points, or 3.4%, to close at 51,523.06. The Nasdaq composite sank 5.5% to 24,315.00, leaving it nearly 12% below the record it set last month. A drop of more than 10% from a peak is known as a correction. The slide more than erased Wednesday's rally, which had been the market's best day in three months.

Chip and data-center companies took the heaviest losses. Nvidia, the company that has become the face of the AI boom, fell 9.3%, and Advanced Micro Devices tumbled 17.3%. Markets overseas felt the pressure too, with South Korea's Kospi index down 5.3%.

Analysts pointed to several worries at once: the high cost of borrowing to build data centers, warnings that AI stock prices had climbed too far, and the results of Tuesday's midterm elections. Democrats and newly elected governors in several states ran on pledges to rein in data centers, which critics blame for higher electricity bills. Investors fear that could mean construction pauses and fewer orders for AI chips.

Because AI companies now carry so much weight in the major indexes, a bad day for a handful of them quickly becomes a bad day for the whole market, and the sell-off is being watched for signs of how much political risk investors are willing to price in.