The Nasdaq Composite tumbled approximately 4% today as investors abandoned high-flying artificial intelligence stocks, signaling a sharp retreat from the sector that dominated market sentiment earlier this year. Shares of major chipmakers and data-center suppliers bore the brunt of the sell-off, marking a sudden end to a period of heavy infrastructure investment.
The broader market felt the sting. The Dow Jones Industrial Average dropped 800 points, while the S&P 500 headed toward its weakest daily performance since early April 2025—a period defined by volatility surrounding the implementation of tariffs during the Trump administration’s term.
Qualcomm Earnings Spark Sector Sell-off
Market sentiment soured further following a disappointing earnings report from Qualcomm. The semiconductor giant disclosed a drop in revenue, casting doubt on the immediate growth trajectory for hardware suppliers and accelerating the rotation away from AI-related assets that had enjoyed post-election gains.
“Yesterday was a relief rally, and today’s more about investors being disappointed in Qualcomm earnings and the continuation of the rotation trade away from AI,” said Keith Buchanan, senior portfolio manager at Globalt Investments.
European Resilience Amid Energy Stability
While U.S. indexes faced significant pressure, European markets remained more resilient. Brent crude remained well below $100 a barrel, trading lower than the levels seen before the midterms, when investors had priced in the risk of an escalation in the conflict with Iran.
Recalibrating for a Post-Election Regime
Investors are now recalibrating portfolios to account for a potential regime shift following the midterm elections. The current trend reflects a reassessment of the AI build-out, with capital moving out of tech-heavy growth stocks that fueled the year’s earlier rallies.
Market participants are currently questioning the sustainability of the capital-intensive build-out of AI infrastructure. This shift is being driven by both sector-specific earnings disappointments and a broader rotation of capital away from high-valuation tech stocks. Meanwhile, oil prices remain suppressed compared to previous expectations, as investors continue to unwind bets that the administration would escalate the war on Iran.
More on Qualcomm
Keep reading