The stock market reversed sharply on Thursday, November 5, 2026, as another selloff in artificial-intelligence and semiconductor shares pulled Wall Street lower and erased much of the previous session’s post-election rally.
During morning trading in New York, the S&P 500 was down about 2 per cent, while the Nasdaq Composite had fallen roughly 3.6 per cent by 10:10 a.m. Eastern time.
The Dow Jones Industrial Average was down about 502 points at that point.
The decline later deepened, with the S&P 500 falling more than 3 per cent and the Nasdaq dropping close to 5 per cent in the latest market update.
The figures were not final closing levels as of the newsroom’s 11 a.m. Eastern update, meaning the indexes could still move substantially before trading ended.
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Stock Market: AI stocks lead the reversal
Large technology and chip companies were at the centre of the selloff.
Nvidia shares fell about 6.3 per cent, while Advanced Micro Devices dropped roughly 13 per cent.
CoreWeave, which provides cloud access to artificial-intelligence chips, also fell sharply, adding to concerns about the cost and pace of data-centre expansion.
The latest losses extended a downturn that had already affected chipmakers during the previous session, even as several other parts of the market rallied after the U.S. midterm elections.
Qualcomm shares also came under pressure after the company released fourth-quarter results and issued a forecast that raised concerns about smartphone-chip demand and revenue tied to Apple.
Arm Holdings reported its latest quarterly results after the market’s Wednesday close.
Although its guidance was above some analyst expectations, the outlook did not appear strong enough to satisfy investors who had priced in exceptionally high growth from the artificial-intelligence boom.
Why the post-election rally faded
Wall Street had rallied strongly on Wednesday after Democrats won both chambers of Congress in the U.S. midterm elections.
The Dow rose 1,569 points, or about 3 per cent, on Wednesday, while the S&P 500 gained roughly 1.6 per cent and the Nasdaq advanced about 1.4 per cent.
That rally reflected reduced political uncertainty, falling oil prices and expectations that a divided policy environment could limit sudden changes in taxes, regulation and government spending.
Thursday’s reversal showed that investors were treating technology and AI infrastructure shares differently from the broader market.
Democratic victories in several areas affected by rapid data-centre construction increased concerns that governments could impose tighter rules or temporary pauses on new facilities.
Those concerns are particularly important for companies that sell chips, servers, power equipment and data-centre capacity.
The market is also weighing whether the enormous capital spending required for AI infrastructure will generate returns quickly enough to justify current valuations.
Broader market signals
The selloff was concentrated in technology, but it overshadowed gains in other companies.
AppLovin shares jumped after the marketing-software company reported stronger-than-expected revenue and profit and authorized additional stock buybacks.
Tapestry, the owner of the Coach and Kate Spade brands, also rose after reporting better-than-expected results and lifting its full-year outlook.
The mixed performance suggests that Thursday’s move was not a uniform rejection of U.S. equities.
Instead, investors were rotating away from some of the most crowded AI-related positions while continuing to buy selected companies with strong earnings or more defensive business models.
Oil prices also moved higher after falling sharply on Wednesday, while the yield on the 10-year U.S. Treasury note eased to about 4.86 per cent from 4.90 per cent late Wednesday.
Lower bond yields can support high-growth technology companies by reducing the relative pressure from interest rates, but the effect was not enough to offset the renewed selling in chip and data-centre shares.
What the reversal means for Canadian investors
Canadian investors with exposure to U.S. technology shares, semiconductor exchange-traded funds or global equity funds could see the impact reflected in portfolio values when North American markets reopen and settle.
The immediate move does not by itself confirm that a broader bear market has begun.
Market leadership can shift quickly when investors reassess expected growth, interest-rate expectations, regulation or corporate spending plans.
However, the size of Thursday’s reversal highlights the risk of concentrating a portfolio in a small group of high-priced technology companies.
It also shows why daily index gains can provide an incomplete picture of market conditions when a handful of mega-cap companies account for a large share of an index’s value.
What investors will watch next
Investors will watch whether chip shares recover later in Thursday’s session or whether selling spreads to financial, consumer and industrial companies.
They will also look for further details from companies involved in AI infrastructure, including spending plans, data-centre demand and the timing of expected revenue growth.
The next market-moving signals will include corporate earnings, interest-rate expectations, oil prices and any policy proposals affecting data centres or large technology firms.
For now, the main message from Wall Street is that the strong post-election rally did not settle the larger debate over AI valuations and infrastructure spending.
Frequently Asked Questions
Why did the stock market fall on November 5, 2026?
The decline was led by AI, semiconductor and data-centre shares amid concerns about valuations, infrastructure spending, smartphone-chip demand and possible regulation after the U.S. midterm elections.
How much did the Nasdaq fall during morning trading?
The Nasdaq Composite was down about 3.6 per cent at 10:10 a.m. Eastern time, with the decline later approaching 5 per cent in the latest update.
Which companies led the market decline?
Nvidia, Advanced Micro Devices, CoreWeave and other semiconductor or AI-infrastructure companies were among the largest decliners.
Was Thursday’s decline a final market close?
No. The figures reported in this update were intraday levels, so the indexes could move before the closing bell.
What should Canadian investors watch next?
Investors will be watching further technology earnings, AI infrastructure spending plans, interest-rate expectations, oil prices and potential data-centre regulation.
Fact-Checked: Key market figures and company developments were checked against Nasdaq market information and official investor-relations releases from Qualcomm and Arm Holdings.
Disclaimer: This article is for general news and information only and is not personalized investment advice.