Chip stocks slaughtered as Wall Street suffers worst post-midterm day since 1896

Wall Street's midterm celebration lasted one day. Chip stocks got taken to the woodshed Thursday, and the Dow Jones Industrial Average ( ^DJI ) fell 3.4%, its worst second session after a midterm election in data going back to its start in 1896.

It took the Nasdaq Composite ( ^IXIC ) six minutes to erase its entire post-election rally. Then the selling got worse.

The tech-heavy index closed down 5.5%, and the S&P 500 ( ^GSPC ) lost 4.4%. It was the worst day for both since the April 2025 tariff crash.

Investors bought stocks Wednesday after Democrats won control of both chambers of Congress , helped by falling oil prices and lower Treasury yields. Thursday, the focus shifted to what a Democratic Congress could mean for the AI build-out, and in particular for the data centers driving it .

It was also the S&P 500's worst second day after a midterm in data going back nearly a century. The previous low came in 2002, when the index fell about 2.3%.

This week has an echo from 1896. The day after William McKinley won the White House that November, the Dow jumped about 4.5%, then gave back about 2% the next session. On Wednesday, the Dow jumped 3%, its best day after a midterm since 1982.

The Nasdaq-100 ( ^NDX ), in correction territory since Monday, fell 6.4% for its worst day since March 2020. The broader Nasdaq Composite joined it, closing nearly 12% below its Oct. 6 record. Both indexes also closed below their 200-day moving averages for the first time since April. Many traders treat that line as the boundary between an uptrend and a downtrend.

The PHLX Semiconductor Index ( ^SOX ) sank 12%, its worst day since March 2020, leaving it about 38% below its June record.

The S&P 500 shed about $3 trillion in market value. Nvidia ( NVDA ) alone lost about $450 billion, and chipmakers as a group gave up more than $1.5 trillion.

Memory and storage stocks took the worst of it, with SanDisk ( SNDK ), Western Digital ( WDC ), Seagate ( STX ), and Micron ( MU ) all suffering steep double-digit losses. AMD ( AMD ), Marvell ( MRVL ), Arm ( ARM ), and Lam Research ( LRCX ) fell sharply too. Even the biggest names, Nvidia, Broadcom ( AVGO ), and Taiwan Semiconductor ( TSM ), fell 9% or more.

The damage spread across the AI supply chain. Cloud provider Nebius ( NBIS ) fell double digits and CoreWeave ( CRWV ) nearly 10%, along with networking and optical names Astera Labs ( ALAB ), Lumentum ( LITE ), Coherent ( COHR ), Dell ( DELL ), Corning ( GLW ), and Quanta Services ( PWR ).

Speculative favorites went down with them. Tesla ( TSLA ), SpaceX ( SPCX ), Robinhood ( HOOD ), Coinbase ( COIN ), and Strategy ( MSTR ) each fell 9% or more. (Disclosure: Yahoo Finance has a partnership with Coinbase.)