Wall Street suffered its steepest sell-off in months on Thursday, 5 November 2026, as investors dumped shares in artificial-intelligence and semiconductor companies amid growing questions about the industry's spending plans and the political outlook for new data centres.
The technology-heavy Nasdaq Composite closed down 5.5%, while the S&P 500 fell 4.4% and the Dow Jones Industrial Average lost 3.4%, or more than 1,800 points, according to Associated Press market-close figures.
The losses reversed the previous day's post-election rally.
WHY DID SHARES FALL SO SHARPLY?
The market decline was concentrated in technology stocks that had benefited from optimism about artificial intelligence.
Investors reassessed the scale of spending on data centres, the expected returns from AI investment and the possibility of tighter restrictions on new projects after the US midterm elections.
Chipmakers were particularly exposed. Reuters reported sharp losses across the semiconductor sector and weakness in Qualcomm following disappointing smartphone-chip sales.
The sell-off spread beyond technology into other sectors as market volatility increased.
WHAT HAPPENED IN LONDON?
The FTSE 100 finished 46.55 points lower, a decline of approximately 0.4%, at 10,782.66, despite having risen strongly earlier in the day. London's mid-cap FTSE 250 also fell, ending 0.9% lower at 24,701.98.
British markets faced an additional challenge from the Bank of England, which raised its benchmark interest rate by a quarter of a percentage point to 4%.
Investors were weighing the prospect of further increases if inflation pressures persist.
WHAT DOES IT MEAN FOR UK INVESTORS?
People holding global equity funds, workplace pensions and personal investment portfolios may have exposure to large American technology companies even if they do not own those shares directly.
The effect on any individual portfolio depends on its asset allocation and investment horizon.
A sharp one-day decline is significant but does not, on its own, establish that a prolonged bear market has begun. Market prices can move rapidly as investors reassess earnings, interest rates and political developments.
THE INTERNATIONAL PICTURE
The decline in US technology shares affected sentiment in Europe and other markets, but stock markets did not all move in the same direction. It would be inaccurate to describe every international exchange as having crashed.
WHAT HAPPENS NEXT?
Investors will watch company earnings, semiconductor demand, US policy on data-centre expansion, bond yields and central-bank decisions for clues about whether the sell-off continues.
Market figures in this report reflect the Thursday closing session and are not live quotations.
This report is for general information and is not investment advice.