The closing session on Wall Street was marked by a sharp decline, with commentary suggesting a potential 'bloodbath' in the financial market. The technology index Nasdaq registered a significant drop of 5.52%, representing the largest devaluation in a year and a half, since April 2025, placing it in a correction phase, defined as a loss exceeding 10% of its previous record, reached in October.
Other important stock market indicators also suffered significant declines, nullifying the profits made the previous day. The extended S&P 500 fell by 4.35%, while the more selective Dow Jones Industrial Average decreased by 3.44%.
Jose Torres from Interactive Brokers observed that the market was expected to have overcome the crisis after the post-election recovery, but a true 'bloodbath' suddenly occurred on Wall Street.
Investors are evaluating the results of the midterm elections as a limiting factor for the advancement of artificial intelligence (AI). This is because several Democratic candidates opposed the installation of data centers in their electoral districts during the campaign, citing negative impacts on populations and territories.
Additionally, residents of dozens of cities in the United States approved restrictions or even prohibitions for data centers on Tuesday, whose proliferation requires massive energy consumption.
Conglomerate technology companies focused on semiconductors, which had already shown considerable setbacks on Wednesday, intensified their losses on the current day. Notable examples include Broadcom (-10.15%), Micron (-17.77%), AMD (-17.39%), and Intel (-10.39%).
Nvidia, which holds the second-largest global market capitalization, recorded a retraction of 8.91%, equivalent to a devaluation of 400 billion dollars. The so-called Magnificent Seven—which includes Nvidia, Meta, Alphabet, Microsoft, Amazon, Apple, and Tesla—saw their combined market capitalization decrease by 800 billion dollars, an amount greater than Sweden's Gross Domestic Product.
Art Hogan from B. Riley Wealth Management told AFP that 'since doubts arose about the investment amounts in data centers, investors have reacted particularly violently.'
Historically, Wall Street's rapid rise in recent years has been driven by enthusiasm for AI. However, the loss recorded on this day was generalized, affecting traditional assets as well.
Patrick O'Hare from Briefing.com anticipated, when questioned by AFP, that 'investors are very sensitive to this weakness in quotes and expect volatility to decrease to return to penalized values and gain from this drop.'
The market was also impacted by the recovery of oil prices the day after a sharp drop, according to analysts. After the election euphoria, investors adopted a more cautious stance due to the lack of concrete progress in the Middle East.
This risk aversion benefited federal debt, as its bonds are considered safe-haven assets. In 10-year bonds, the yield—which varies inversely with prices—fell from 4.898% the previous day to 4.84%.
Challenges related to AI may overshadow the official employment report scheduled for Friday in October. Patrick O'Hare predicted that 'if the numbers confirm the solidity of economic activity, they could cause a nice recovery movement in the markets.' The expected unemployment rate is 4.2%, indicating stabilization.
