Stock Market Today, Nov. 5: Nasdaq Suffers Worst Day in 18 Months as AI Trade Comes Under Fire

The Nasdaq plunged 5.52% on Nov. 5, its worst session in 18 months, pushing the index into correction territory. The S&P 500 fell 4.33%, its worst day since early 2025.

Two catalysts drove the rout: a reassessment of returns on AI investment and regulatory concerns tied to the midterm elections. Semiconductor stocks took the hardest hit, including NVDA and AMD, the names most exposed to the AI trade under scrutiny.

The core question hitting the tape is whether billions of dollars in AI data center spending can generate returns large enough to justify current valuations. A 5.52% single-day drop suggests investors are no longer giving that spending the benefit of the doubt. Interpretation: when the market's leadership group gets repriced on return-on-investment doubts rather than earnings misses, the selling tends to hit the most crowded positions first, which fits the outsized damage in semiconductors.

The damage was not confined to chips. TPR and TRIP are also tagged to this macro move, indicating the sell-off carried beyond the AI complex into broader equity exposure.