U.S. stocks fall sharply as technology and chip shares decline after midterms

THE BARE STORY

U.S. stocks fell sharply Thursday, led by losses in technology and semiconductor shares, after midterm election results indicated that Democrats had won control of both chambers of Congress.

The Dow Jones Industrial Average dropped about 1,220 points, or 2.2%, reversing much of its gain from the previous session. The S&P 500 fell about 3%, while the Nasdaq declined 4.8%, placing it more than 10% below its peak from the previous month.

The Cboe Volatility Index rose above 28 during trading, its highest level since late March. Trading in volatility-index call options also increased sharply, according to market data cited in the summaries.

Chip stocks were among the largest decliners. AMD fell 12%, Nvidia dropped 7%, and Qualcomm declined 9% after issuing a first-quarter outlook that included adjusted earnings below analyst expectations. Qualcomm Chief Executive Cristiano Amon said the company faced supply constraints rather than a demand problem.

Analysts cited uncertainty about the outlook for artificial intelligence infrastructure and data centers following the elections, though the precise cause of the market selloff was unclear. OpenAI announced a data-center policy framework that it said would require the company to cover electricity and infrastructure costs, develop site-specific water plans, and offer employment opportunities to local workers and businesses.