Selloff Wipes $2.2 Trillion From U.S. Market, Sends VIX to 28.18
Key Facts
A selloff in U.S. stocks erased about $2.2 trillion in market value during Thursday's session on November 5, according to Benzinga, while the VIX rose to 28.18 at the close, versus 16.61 in the previous session, according to EL7 data. The S&P 500 fell 4.4% to 7,353.73, and the Nasdaq Composite dropped 5.5% to 24,315, according to the Associated Press. The moves reflected a broader retreat from risk, spreading from technology and chip stocks to major indexes. Reuters said the selling was partly tied to unwinding crowded bets on artificial intelligence and a pullback from the sharp rally in the previous session. The agency said some analysts saw investors hedging against the possibility of further weakness.
Semiconductors were among the hardest-hit sectors, with the Philadelphia Semiconductor Index falling 12% to its lowest level in more than six months, according to Reuters. Nvidia shares fell 9%, while AMD dropped 17% during the session. Nvidia closed at $181.60, compared with $200.13 on November 4, according to EL7 data. Micron also closed at $656.39, down from $795.23 in the previous session. AMD ended trading at $404.40, versus $488.78 on November 4, in a decline that hit stocks directly tied to AI infrastructure.
The decline spread across the broader market: the S&P 500 posted its steepest daily drop since April 2025, according to the Associated Press. Thursday's loss also erased the previous session's gains, which had been the index's best in three months. The sequence shows how quickly market performance reversed over two consecutive sessions. The VIX's rise to 28.18 from 16.61 came alongside declines in the major indexes. The moves showed that pressure was not confined to a small group of chip stocks, but accompanied a broad drop in U.S. equities.
Benzinga linked the selloff to investors scaling back bets on AI, amid concerns that a Democratic victory in the midterm elections could slow data center expansion. The agency said, "China's delay in approving imports of Nvidia's H200 chips and weak earnings expectations from Qualcomm added pressure." The Associated Press reported that Democratic victories had revived the possibility of a temporary pause on data center construction. In the gubernatorial races where the agency declared winners, 32 of 34 winners supported regulation or tighter restrictions on the centers. Twelve of those winners supported a ban or temporary pause, according to the agency's analysis.
Results from local ballot measures offered further signs of opposition to data center plans: restrictions passed in 44 of 45 measures with completed counts. The analysis covered 47 ballot measures in 44 municipalities and 12 states, according to the Associated Press. The agency's voter survey also showed that about three-quarters of U.S. voters oppose building a new data center in their communities. In the bond market, the yield on 10-year U.S. Treasury notes fell to 4.84% on November 5, from 4.90% late Wednesday. The Associated Press said the yield decline came as investors turned to safer assets while stocks fell.
A Reuters report, citing a Nomura note during trading, estimated that leveraged exchange-traded funds could sell about $47 billion in stocks near the close to rebalance their portfolios. If realized, that would be the second-largest amount in Nomura's data dating back to July 2006. Reuters said the selloff also reflected a pullback from the sharp rise in the previous session, alongside the unwinding of AI bets that had driven markets higher for months. Investors, the report said, were hedging against the possibility of continued weakness in equities. These factors put pressure on chip companies in a context combining volatile investor positioning with concerns about financing data center expansion.
The selloff's effects spread to Asian markets on Friday morning, November 6: Japan's Nikkei fell 6.1% to 57,332.92, and South Korea's Kospi dropped 6.3% to 5,042.65, according to the Associated Press. In U.S. economic data, the October jobs report was scheduled for release on Friday, November 6. Ahead of its release, a FactSet survey forecast the addition of 65,000 jobs and an unemployment rate holding at 4.2%. The Associated Press attributed these expectations to the survey; they were estimates made before the report's release. Investors were awaiting the data amid the stock selloff and rising volatility.