Nasdaq Tumbles Over 5% as Tech Stocks Sink
Chipmakers and AI data-centre companies lead losses after Wall Street reverses its post-midterm rally.
Updated on Nov. 5, 2026 in Stock Markets
The tech-heavy Nasdaq 100 fell more than 5 percent in late trading, while the Dow Jones dropped around 3 percent. Wall Street completely reversed the previous day's post-midterm rally, erasing nearly US$2 trillion from the value of America's biggest technology companies.
Why it matters
The sell-off reflects investor concern that Democrats' sweeping midterm victory could bring greater scrutiny of the technology sector and delay new data centres. Doubts about whether heavy AI spending will deliver returns also weighed on the market, making it one of the sharpest falls since the April 2025 Liberation Day tariff wipeout.
The Nasdaq 100 fell more than 5 percent in late trading and the Dow Jones dropped around 3 percent, with chipmakers and AI data-centre names among the biggest losers. Final closing levels were not yet confirmed, and whether the slide holds into the next session remains unknown.
The players
Nasdaq
The Nasdaq is a US stock exchange and index heavily weighted toward technology companies, making it a key barometer of tech-sector sentiment.
Dow Jones Industrial Average
The Dow Jones is a widely followed US stock index tracking 30 large publicly traded companies, often used as a benchmark for the broader US market.
The details
Chipmakers and companies tied to the artificial-intelligence data-centre boom were among the hardest hit as Wall Street reversed the previous day's post-midterm rally. New Zealand's share market, which hit a record high of 14,090 after climbing over 2 percent, is expected to open lower in reaction.
Timeline
April 2025: Liberation Day tariff wipeout hit Wall Street, one of the few comparable falls for the Nasdaq.
November 4, 2026: New Zealand's market reached a record high of 14,090 after gaining over 2 percent.
November 5, 2026: The Nasdaq 100 fell more than 5 percent in late trading and New Zealand's market was expected to open lower.
Market Dynamics
The Nasdaq's slide is one of its biggest since the Liberation Day tariff wipeout in April 2025, placing this drop among the sharpest technology-led sell-offs in recent memory. Rising doubts about returns on AI spending and the policy outlook after the midterms are now shaping how investors price the sector.
Investors holding Nasdaq-linked index funds or tech-heavy portfolios saw sharp paper losses in late trading. Those with exposure to chipmakers and AI-related stocks may want to review their allocations as the market reprices the sector.
The takeaway
Concentrated bets on a single theme, such as AI, can amplify losses when sentiment shifts quickly. Diversifying across sectors can reduce exposure to sudden sell-offs in one area of the market.
Further reading
For more on the forces moving prices, see the latest Stock Markets coverage.
