Stock market today: Nasdaq plunges 5% as chip stocks sell off, Dow and S&P 500 give back post-election rally gains

US stocks fell suddenly on Thursday as AI and chip stocks sold off, erasing the gains from Wednesday’s post-election rally.The Dow Jones Industrial Average (^DJI) tumbled 2.2%, or over 1,200 points. The S&P 500 (^GSPC) fell 3.3%, and the tech-heavy Nasdaq Composite (^IXIC) dropped 5%, putting the index on track to close in a correction.The PHLX Semiconductor index (^SOX) dived 11% as Nvidia (NVDA), Micron (MU), and other chip names sank.Investors continued to process the Democrats' sweeping victory on Tuesday and its implications for markets and the economy. Amid relief that election uncertainty has been removed, the stock market continues to sort out the perceived winners and losers of a regime change on Capitol Hill.Oil prices rose amid uncertainty that President Trump would pursue a deal with Iran to end the war in the Middle East. Optimism grew overnight after Vice President JD Vance said, "The reason we lost [the midterm elections] is the war," in a post on X suggesting the party should push for a resolution to the conflict. Brent crude oil (BZ=F) prices traded around $97 per barrel, while US benchmark WTI crude (CL=F) stood at $90 per barrel.A report from Challenger, Gray & Christmas showed layoff plans in October fell to the lowest level since 2023 as companies turned their attention to retaining existing employees, setting the scene for Friday's key employment report.On the earnings calendar, Duke Energy (DUK), Airbnb (ABNB), and Lumentum (LITE), among others, report results.