AE Wealth Management: Market Minute — AI and chip sell-off pressures markets after post-election rally

AI and chip sell-off pressures markets after post-election rally

U.S. stocks sold off sharply Thursday, with technology and semiconductor companies taking the biggest hit. By late morning, the S&P 500 was down more than 3%, the Nasdaq had fallen about 5% and the Dow had dropped more than 1,000 points.¹

The biggest losses are in AI, semiconductor and data-center-related stocks. The PHLX Semiconductor Index fell about 10%, with Nvidia, Micron and other chip names under pressure. These companies have been a major driver of market gains, so a sharp pullback in that group can quickly show up in the broader indexes.¹

The move comes just a day after a strong post-election rally. With the election decided, attention has quickly shifted to what a change in congressional control could mean for data-center construction and AI development. Investors are now trying to price in the possibility of permitting delays, new restrictions or other policy changes, even though the details are still far from clear.

What our investment team is watching

For now, this looks more like the market repricing policy risk than a fundamental change in the economy or demand for AI. Stocks were also near record highs going into today, and many AI and chip companies had posted strong gains. That left them more exposed when investors suddenly had a new risk to consider.

We could see more volatility as investors sort out which campaign proposals have a real chance of becoming policy. That does not mean the AI investment story is over. Data centers, semiconductors and the infrastructure behind them are still important long-term themes. What changed today is the market’s view of the risks around that growth.

What this means for you

A drop like this gets attention, especially when some of the market’s biggest and most familiar companies are leading it. A few things to keep in perspective:

• One day does not make a trend. Today’s sell-off follows a strong rally and comes as investors work through a new political and policy backdrop.
• It’s worth keeping in mind that the S&P 500 and Nasdaq Composite are still up year to date.
• A handful of large technology companies can have an outsized effect on the major indexes. When AI and semiconductor stocks fall hard, the headline numbers can look especially dramatic.
• Market pullbacks are part of investing. A long-term financial plan should already account for periods when markets move sharply lower.
• If today’s move creates an opportunity, it should be considered in the context of your goals, time horizon and risk tolerance, not as a reaction to one trading day.

We’ll continue to watch how the policy picture develops and what it means for markets. If today’s volatility has you wondering about your portfolio, talk with your advisor about how it fits into your long-term plan.

Sources:

¹ Yahoo! Finance. Nov. 5, 2026. “Stock market today: Nasdaq plunges 5% as chip stocks sell off, Dow and S&P 500 give back post-election rally gains.” https://finance.yahoo.com/markets/live/stock-market-today-thursday-november-5-dow-sp-500-nasdaq-plunge-chip-stocks-melt-down-193726491.html. Accessed Nov. 5, 2026.

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