Wall Street’s best post-midterm rally in 44 years lasted just one day—then $3 trillion vanished as chip stocks plunged over AI fears

Wall Street’s strongest post-midterm rally in 44 years lasted just one session. The rebound faded sharply Thursday as chip stocks came under pressure amid renewed fears surrounding artificial intelligence, wiping out $3 trillion.

Technology shares lead the decline

The Nasdaq dropped about 5% on Thursday, while the S&P 500 fell nearly 4%. The declines came only a day after investors had welcomed a Democratic sweep of Congress, which had helped drive the market higher.

The abrupt reversal placed technology stocks at the center of the selloff. Chip shares, which had been closely linked to enthusiasm over AI, plunged as concerns about the sector intensified.

A rapid shift in market sentiment

The move from a broad rally to a steep decline underscored how quickly sentiment changed. The market’s response also showed the immediate impact that pressure on chip stocks can have on major indexes, particularly the technology-heavy Nasdaq.

For investors, the sequence marked a sharp contrast: optimism following the election gave way within a day to a decline that erased trillions of dollars in market value. The available information does not indicate whether the selloff continued beyond Thursday.

Conclusion

Wall Street’s post-midterm surge was short-lived. Thursday’s losses, led by chip stocks and broader AI concerns, turned a celebratory market move into a major one-day reversal.