NASDAQ posts biggest drop since 'Liberation Day' last year

Nvidia falls 9%, Micron drops 17%

[Reuters]
[Reuters]

All three major US stock indexes tumbled Thursday (local time) as fears over tightening AI industry regulation and slowing data center investment triggered a broad selloff in technology shares. The Philadelphia Semiconductor Index plunged more than 12%, its steepest single-day drop since March 2020.

NASDAQ closed down 1,421.52 points, or 5.52 percent, at 24,315.00 on the New York Stock Exchange — its largest percentage decline since "Liberation Day" in April last year. The index has now fallen more than 10 percent from the all-time high it set last month, entering technical correction territory.

The Dow Jones Industrial Average shed 1,833.06 points, or 3.44 percent, to close at 51,523.06, while the S&P 500 dropped 334.89 points, or 4.36 percent, to finish at 7,353.73.

The Philadelphia Semiconductor Index plummeted 12.25 percent, marking its worst single-session loss since March 2020, early in the COVID-19 pandemic.

Nvidia fell 9.26 percent, Broadcom dropped 10.43 percent, Micron slid 17.46 percent, AMD lost 17.26 percent and SanDisk tumbled 22.26 percent.

The CBOE Volatility Index, Wall Street's so-called fear gauge, surged roughly 70 percent to 28.18. The Fear & Greed Index fell to 20, entering extreme fear territory.

Semiconductor stocks had already been under pressure Wednesday on concerns about delays in AI data center construction, but selling accelerated after news broke that Microsoft was reconsidering its investment plans.

According to Bloomberg and other media, Microsoft is reviewing whether to pull back from some high-risk projects and is conducting direct inspections of construction sites operated by major neo-cloud companies, citing delays, permitting issues and cost burdens. The completion of a Texas data center operated by neo-cloud firm IREN is reportedly at risk of being pushed back by several months due to fiber-optic cable installation problems.

Seo Sang-young, a managing director at Mirae Asset Securities, said the delays signal that data center construction setbacks are now affecting actual contract fulfillment and capital deployment. "This has raised concerns about whether the order backlogs held by neo-cloud companies can actually be converted into real sales and cash flow," Seo said.

Meta executives also warned that data center construction could face disruptions following the midterm elections, deepening market anxiety over the sustainability of AI capital expenditure.

The selloff that began in technology stocks spread to financials, industrials and the broader market. Tesla and SpaceX fell 10.77 percent and 9.3 percent, respectively.


moon@heraldcorp.com