Chip selloff sends Nasdaq into correction after midterm elections

Overview

Updated 47 minutes ago

The Philadelphia Semiconductor Index fell 12.25% on November 5, 2026, to 9,011.14, its worst day since March 2020. The drop pushed the Nasdaq Composite into a correction, more than 10% below the record close it set on October 6.

Two things landed at once. Qualcomm gave a soft profit forecast, and Democrats swept both chambers of Congress in the midterms, which investors read as a brake on AI data-center construction. Chip demand has ridden that construction for two years.

Why it matters

If AI construction slows, chip stocks held in many retirement accounts fall further and the data-center building boom could stall.

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Key Indicators

12.25%

Philadelphia Semiconductor Index one-day drop

Worst single day since March 2020.

9,011.14

Philadelphia Semiconductor Index close

Down sharply from its October high.

10%+

Nasdaq below its October 6 record

The index entered correction territory.

9.5%

Qualcomm one-day drop

After a soft profit forecast and missed smartphone chip sales.

$450B

Nvidia market value lost

Shares fell more than 9%.

$1T

Magnificent 7 market value lost

Combined drop on November 5.

40 of 41

Data-center ballot measures rejected

Local votes across 10 states on November 3.

Voices

Curated perspectives — historical figures and your fellow readers.

People Involved

Cristiano Amon

Chief executive, Qualcomm

Leading Qualcomm through a memory shortage and a soft forecast

Peter Boockvar

Chief investment officer, OnePoint BFG Wealth Partners

Commenting on the selloff

Mark Hackett

Chief market strategist, Nationwide

Commenting on the selloff

Dina Powell McCormick

President, Meta

Warned data-center construction will get harder

Organizations Involved

Qualcomm

Semiconductor company

Issued a soft forecast; shares fell 9.5%

Qualcomm designs chips for smartphones, cars and data centers.

Nvidia Corporation

Semiconductor company

Fell more than 9%, losing almost $450 billion in market value

Nvidia designs the graphics processors that power most AI data centers.

Timeline

October 2026 November 2026

5 events Latest: Today

Tap a bar to jump to that date

November 2026
Chip index falls 12.25%; Nasdaq enters correction
Today Market

The Philadelphia Semiconductor Index posts its worst day since March 2020. The Nasdaq closes more than 10% below its record.
Today
Qualcomm issues soft forecast as memory shortage limits supply
Earnings

Qualcomm's smartphone chip sales miss estimates and its guidance disappoints.
Yesterday
Meta president says data-center construction will be 'harder'
Statement

Dina Powell McCormick tells a Wall Street Journal conference the political climate has changed.
Yesterday
Democrats sweep Congress; voters reject data-center measures
Election

Democrats win both chambers and key governor races. Voters reject data-center restrictions in 40 of 41 local ballots.
2 days ago
October 2026
Nasdaq closes at record 27,599.89
Market

The Nasdaq Composite sets its record close, the high-water mark for the slide that follows.
October 6th, 2026

Scenarios

Hyperscalers cut 2027 data-center spending plans

Possible Resolves by Feb 15, 2027

Discussed by: Analysts cited by CNBC and Reuters, including Peter Boockvar and Richard Clode

If Meta, Alphabet, Amazon or Microsoft trim capital-spending guidance in their next quarterly reports, the chip selloff extends. The trigger is a company filing or earnings call that lowers 2027 infrastructure budgets.

Nasdaq falls into a bear market

Possible Resolves by Q2 2027

Discussed by: Market strategists including Sameer Samana of Wells Fargo Investment Institute

A bear market means a 20% fall from the record. The Nasdaq would need to close below roughly 22,080, down from 27,599.89 on October 6.

More states restrict data-center construction

Likely Resolves by Nov 30, 2027

Discussed by: Ballotpedia and CNBC election analysis

Voters rejected data-center measures in 40 of 41 local ballots on November 3. If state legislatures follow, the buildout faces more delays.

Historical Context

2 moments from history that rhyme with this story — and how they unfolded.

March 2000-October 2002

Dot-com crash (2000-2002)

The Nasdaq peaked at 5,048.62 on March 10, 2000, driven by internet and telecom spending. When capital dried up, the index fell about 78% to roughly 1,114 by October 2002.

Then

Telecom equipment makers like Lucent and Nortel collapsed, and thousands of startups shut.

Now

The buildout left fiber capacity that took years to use. The Nasdaq took 15 years to regain its 2000 high.

Why this matters now

Today's AI data-center spending mirrors the telecom buildout: heavy capital, uncertain revenue, and a market that punishes any sign of a slowdown.

October-December 2018

Fourth-quarter 2018 selloff

The Federal Reserve raised interest rates and signaled more tightening. The S&P 500 fell about 14% in the fourth quarter, and the Nasdaq entered a correction.

Then

The Fed reversed course in early 2019 and stocks rallied.

Now

The episode showed how fast a rate-driven selloff can reverse when policy shifts.

Why this matters now

Rising rates and tighter financing are part of the current backdrop, and 2018 shows corrections can end quickly if the Fed changes course.