Stock Futures Mixed After AI Sell-Off Sends Nasdaq Into Correction Territory

The Nasdaq Composite fell 5.5%, closing more than 10% below its October 6 record high and marking its worst session since April 2025. The S&P 500 lost 4.4% and the Dow Jones Industrial Average dropped more than 1,800 points, or 3.4%.

CNN reported the rout wiped out roughly $2.5 trillion in market value and drove the VIX volatility index up about 70%, its largest one-day surge in nearly two years. All 11 sectors of the S&P 500 closed lower, but shares tied to the AI build-out fell hardest: neoclouds CoreWeave and Nebius plunged roughly 10% and 15%, respectively, and Nvidia dropped 9%, turning negative for the year. Qualcomm fell 9.5% after warning that higher memory chip costs were hurting sales, CNN reported. Micron Technology and Advanced Micro Devices plummeted 17% each, while the Magnificent Seven shed more than $1 trillion in aggregate market cap. A closely watched chipmaker index dropped 12.3%, its worst day in roughly six-and-a-half years, and the Nasdaq 100 sank 6.36%, suffering its worst session since March 2020. Shares of Tesla and SpaceX fell 11% and 9%, respectively.

The sell-off followed Democratic victories in the House, Senate and key governorships, including Texas, which sparked concerns about a potential slowdown in data center construction, CNBC reported. Texas Governor-Elect Gina Hinojosa called for a pause on new data center projects until laws to protect citizens are in place, Investing.com reported. Democrats secured majorities in both chambers of Congress. Separately, reports indicated AI startup Anthropic was facing investor scrutiny over plans to list publicly later this month, with the possibility of a delay.

Asian Markets Follow Wall Street Lower

Losses spilled into Friday’s Asian trading session. South Korea’s Kospi plunged more than 6%, while Japan’s Nikkei 225 dropped 5.9% and entered bear market territory, CNBC reported. CNN noted the Kospi fell almost 9% at the open, triggering a 20-minute trading halt on the exchange. South Korea’s Kospi was on the verge of a 20% wipeout from late-October levels.

Payrolls Report Looms as Next Catalyst

Early Friday, S&P 500 futures were little changed, Nasdaq-100 futures added 1%, and Dow futures shed 467 points, or 0.91%, CNBC reported. By 01:17 ET, Nasdaq futures had risen 0.68% to 26,936.0 points, while S&P 500 futures fell 0.1% to 7,375.50 points and Dow futures declined 1% to 51,082.0 points. Investors await the October payrolls report due Friday morning, with Dow Jones consensus estimating 59,000 jobs added last month and the unemployment rate holding steady at 4.2%, CNBC reported.

Investors Debate Whether the AI Trade Is Over

Some market participants view the pullback as a buying opportunity. Victoria Greene, chief investment officer at G Squared Private Wealth, told CNBC Thursday that “the AI trade, in my opinion, is not dead here,” adding that the dip offers “a good discount.” She cited management teams’ comments about capacity crunches during earnings season. CNN reported that CoreWeave shares are down 76% since a June 2025 peak shortly after the company went public, while neocloud Nebius has fallen 58% from its peak this June.

Questions Investors Are Asking

How far has CoreWeave fallen from its peak?
CNN reported CoreWeave shares are down 76% since reaching a peak in June 2025, shortly after the company went public.

What happened to market volatility on Thursday?
The VIX, Wall Street’s fear gauge, surged roughly 70% for its biggest one-day jump in almost two years and hit its highest level in seven months, according to CNN.

More on this story: Wall Street sells off as AI spending concerns hit Nasdaq · Nasdaq Tumbles 3.7% as Investors Rotate Out of AI Stocks into Defensive Sectors