AI Stock Rout Erases $2.2 Trillion as VIX Surges 39%

Wall Street’s post-midterm rally unraveled Thursday as a fresh rout in artificial-intelligence stocks sent the S&P 500 toward its worst day since April 2025 and erased about $2.2 trillion in market value. The Cboe Volatility Index jumped 38.6% to 23.02, its highest since April and sharpest one-day rise since June, while Treasuries and gold drew haven demand. The trigger came from Washington and the chip supply chain. Investors continued to unwind AI trades on bets that a Democratic sweep of Congress would slow data-center expansion. China’s delay in approving imports of Nvidia’s H200 chips and a soft profit outlook from Qualcomm added pressure. “Nvidia tough. Obviously, the neocloud’s tough,” Jessica Lessin, founder and CEO of The Information, said in a CNBC interview. Nvidia shares slid 7%, leading the Dow lower and erasing their gains for the year; the move wiped about $337 billion from Nvidia’s market value. The S&P 500 fell 3.1%, or 239 points, to 7,449. The Dow Jones Industrial Average lost 1,241 points, or 2.3%, to 52,115. The Nasdaq 100 dropped 4.5% to 27,169. Tesla tumbled 10.2%, extending its post-election slide as investors unwound the so-called Trump trade. The Russell 2000 fell 3.4% to 2,759. A separate Benzinga item noted that 10 U.S. tech stocks wiped out $1.7 trillion on Thursday. Bonds rallied as investors sought safety. The 10-year Treasury yield fell 5 basis points to 4.84%; the 2-year yield dropped 8 basis points to 4.50%, and the 30-year yield slipped 3 basis points to 5.25%. Gold rose 1.3% to $4,126 an ounce, and silver edged up 0.6% to $52.61. Bitcoin fell 4.8% to $76,509. West Texas Intermediate crude climbed 2.2% to $90.03 a barrel, and Brent gained 2.3% to $96.76. On the data front, initial jobless claims fell to 189,000 last week from 195,000, below the 196,000 forecast. Nonfarm productivity grew at a 3.6% pace in the third quarter, above the 2.8% estimate, while unit labor costs fell 0.7% versus expectations for a 0.6% rise. Thursday’s performance in major U.S. indices: S&P 500 7,449.41, -3.11% (MTD -1.72%, YTD +8.82%); Dow Jones 52,115.16, -2.33% (MTD +0.67%, YTD +8.43%); Nasdaq 100 27,168.79, -4.46% (MTD -4.28%, YTD +7.60%); Russell 2000 2,758.61, -3.44% (MTD -1.89%, YTD +11.15%). According to Benzinga Pro, the Vanguard S&P 500 ETF fell 3.1%, the SPDR Dow Jones Industrial Average ETF Trust declined 2.5%, the Invesco QQQ Trust sank 4.9%, and the iShares Russell 2000 ETF lost 3.4%. Chipmakers led the tech rout while staples held up. Technology took the hardest hit as investors dumped AI hardware. The Technology Select Sector SPDR Fund fell 6.1%, and the VanEck Semiconductor ETF sank 8.6%. Advanced Micro Devices dropped 13.8%, Micron Technology lost 12.3%, and Qualcomm slid 11.2% after guiding fiscal first-quarter adjusted EPS to $2.15–$2.35, a midpoint below the $2.29 consensus, as fourth-quarter handset revenue fell 26%. Consumer staples held up best: the Consumer Staples Select Sector SPDR Fund slipped just 0.2% as investors rotated into defensive shares, while the Energy Select Sector SPDR Fund dipped only 0.4% with crude higher. All 11 sectors traded lower. Consumer Discretionary fell 3.8%, Industrials 2.8%, Materials 2.5%, Financials 2.1%, Real Estate 1.6%, Health Care 1.1%, and Communication Services and Utilities each 0.6%. About 417 of the S&P 500’s 503 members were in the red. Among Russell 1000 gainers, AppLovin soared 29.6% after a third-quarter revenue and earnings beat and a strong outlook; Piper Sandler lifted its price target to $355. EPAM Systems jumped 18.1% on better-than-expected results, a raised 2026 outlook, and a $1.5 billion increase to its buyback authorization. Unity Software rallied 13.8% after guiding fourth-quarter sales to $688 million–$696 million, well above the $603.6 million estimate. Liberty Media gained 10.5% after announcing a share swap with entities related to John Malone that reduces his voting concentration, alongside third-quarter results. Corpay rose 8.2% after beating estimates and raising its 2026 guidance; Keefe, Bruyette & Woods lifted its target to $525 from $470. On the downside, Dutch Bros plunged 20.9% after narrowing its 2026 sales guidance below estimates, prompting price-target cuts from Wells Fargo and KeyBanc. Caris Life Sciences fell 20.1% after its third-quarter report, even as it raised its 2026 sales outlook to $1.04 billion–$1.05 billion. AI hardware names extended their slide: Applied Optoelectronics sank 17.7%, and Astera Labs lost 16.7%, deepening a post-earnings decline that led UBS and TD Cowen to cut their targets. SanDisk slumped 16.5% alongside Micron, pushing its relative strength index to its most oversold level since April 2025. After the close, Microchip Technology is expected to report EPS of 84 cents; Cloudflare, 34 cents; Affirm, 38 cents; EOG Resources is seen at $4.47; and Live Nation at $1.51. Thursday’s Russell 1000 top gainers: AppLovin +29.61%, EPAM Systems +18.11%, Unity Software +13.75%, Liberty Media +10.47%, Corpay +8.25%. Top losers: Dutch Bros -20.89%, Caris Life Sciences -20.09%, Applied Optoelectronics -17.72%, Astera Labs -16.71%, SanDisk -16.55%.