On November 5, 2026, the US stock markets experienced one of the sharpest daily losses since the “Liberation Day” tariff shock in April 2025. The rally from the previous day following the midterms was completely wiped out. One of the triggers was a massive revaluation of the AI and data-center story in light of the clear Democratic election victory.
Overall Performance on November 5
- S&P 500: −4.4% to 7,353.73 points
- Dow Jones: −3.4% (−1,833 points) to 51,523 points
- Nasdaq Composite: −5.5% to 24,315 points (technical correction, >10% below the high)
- Nasdaq 100: around −6.4% (worst day since March 2020)
According to initial estimates, 2 to 2.5 trillion US dollars in market capitalization were destroyed, which later turned out to be far too optimistic. Reuters later reported a loss of around 2.5 trillion dollars for the Nasdaq-100 alone. All eleven S&P 500 sectors closed in the red. The VIX (volatility index) surged by around 60–70% and reached 28.09 points, an eight-month high – the strongest one-day jump since April 2025.
Which Sectors Were Particularly Affected
AI infrastructure and semiconductors were hit hardest by the force of the sell-off:
- Philadelphia Semiconductor Index (SOX): −12.3% (one of the worst days in years)
- Nvidia: approx. −9%, AMD and Micron: each around −17%, SanDisk: up to −22%
- Neocloud and data-center stocks (CoreWeave, Nebius, IREN, among others): losses in the double-digit percentage range
- Lam Research (equipment for the semiconductor industry): −16.36%
The technology sector as a whole fell by about 7.3%. Industrials and Consumer Discretionary also declined significantly. The concerns triggering the crash mainly revolve around possible stricter regulation and approval hurdles for new data centers under a Democrat-controlled Congress.
Which Sectors Were Less Strongly Affected
Traditionally defensive sectors held up relatively well:
- Consumer Staples: only about −0.7%
- Utilities: similarly moderate losses
Individual non-tech stocks with strong quarterly results were also able to partially swim against the tide. The rotation away from highly valued growth and AI stocks toward more defensive names was clearly visible, but not sufficient to stabilize the overall market.
Assessment of the Partial Recovery in Overnight Trading
In overnight and futures trading on Friday morning, a cautious stabilization emerged. Nasdaq futures were at times around 0.8–1% higher, S&P 500 futures slightly positive, while Dow futures remained mixed to slightly negative. This counter-move could be due to technical relief and partly short-covering after the extreme sell-off. However, it should not be seen as a fundamental trend reversal. The recovery remains fragile and depends heavily on upcoming data and the further development of the AI regulation debate. Many market participants view yesterday’s crash as a possible capitulation move in the overheated AI trade, without fundamentally calling into question the long-term growth prospects of the technology.
Outlook: Impact of the NFP Employment Data Today at 2:30 p.m. CET
Today at 2:30 p.m. CET (8:30 a.m. US Eastern Time) the US employment report for October will be released. Consensus is for around 60,000 to 65,000 new jobs (after only 29,000 in September), an unemployment rate of 4.2%, and wage growth of about 0.3% m/m or 2.9% y/y. An important factor also remains the Fed’s interest-rate policy. Rate expectations have partially shifted further out after the recent sell-off. A significantly stronger employment report could, however, once again raise doubts about whether the Fed has already eased its restrictive stance sufficiently. Against this background, the reactions to the employment data can be assessed as follows:
- Positive / strong (clearly above 80–100k jobs + solid wages): Increases pressure for further rate hikes. Higher yields and a stronger dollar would particularly weigh on growth and AI stocks. Risk of a continuation of the correction.
- Negative / weak (clearly below 40k jobs or rising unemployment): Could dampen rate-hike expectations and trigger a short-term recovery rally. Tech and cyclical stocks would likely benefit in particular. However, fears of stricter AI regulation and recession concerns remain as overhang risks.
- Neutral (close to consensus): Limited market reaction. Focus would quickly return to the political and regulatory AI debate as well as the further development of data-center investments. High volatility remains likely.
Overall, uncertainty about the pace of AI infrastructure build-out currently dominates market sentiment. The employment data can set the direction in the short term, but do not change the fundamental political headwind for the unchecked AI boom.
Disclaimer: The above statements represent solely a personal assessment and analysis based on publicly available information at the time of preparation. They are neither investment advice, a recommendation to buy or sell, nor an invitation to act. Any investment decision should be made on the basis of one’s own research and, if necessary, with the advice of a qualified financial advisor. Past performance is not a reliable indicator of future results. No liability is assumed for the accuracy, completeness or timeliness of the information.
