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Technology stocks tumbled on Thursday, sending the Nasdaq Composite down more than 4% in late-morning trading and putting it on course to close in correction territory. The selloff erased the gains from Wednesday's rally after the midterm elections and deepened investor doubts about the payoff from heavy artificial intelligence spending.

The S&P 500 fell 3.3% and the Dow Jones Industrial Average dropped more than 1,200 points, or 2.2%. The tech-focused Nasdaq 100 slid 4% by mid-morning to its lowest level in five months. The CBOE Volatility Index, Wall Street's fear gauge, jumped above 20.

Chipmakers took the heaviest losses. Advanced Micro Devices (NASDAQ: $AMD ) fell more than 13%, Micron Technology (NASDAQ: $MU ) dropped over 12% and Nvidia (NASDAQ: $NVDA ) lost more than 6%. Qualcomm (NASDAQ: $QCOM ) tumbled about 9% after its quarterly report, and Arm Holdings (NASDAQ: $ARM ) slipped roughly 15%. Qualcomm beat fourth-quarter estimates, but its first-quarter earnings outlook fell short of expectations.

The reversal came one day after a broad rally. The Dow surged 1,569 points, or 3%, on Wednesday, and the Nasdaq rose 1.4%. Investors had welcomed the end of election uncertainty after Democrats won control of Congress. That optimism faded Thursday as traders weighed what the Democratic sweep could mean for AI infrastructure spending and regulation. Opposition to data center projects was an issue in races across the country.

Thursday's drop adds to a difficult stretch for tech. The Nasdaq fell more than 5% in October, its worst month since March 2025, after disappointing earnings from several major tech companies. Investors have grown more skeptical that the hundreds of billions of dollars Big Tech is spending on data centers will produce returns quickly enough. Rising borrowing to fund the buildout has added to those concerns.

Shares of Nvidia (NASDAQ: NVDA) are currently trading at $186.52 while Qualcomm (NASDAQ: QCOM) stock is priced at $153.07.