Markets: Dow falls 1,220 points as tech stocks tumble

The Dow Jones Industrial Average shed 1,220 points on Thursday, a drop of 2.2 percent that erased most of the gains from the previous session.

The S&P 500 declined by 3.2 percent, while the tech-focused Nasdaq Composite fell 4.8 percent. That loss pushed the Nasdaq into correction territory, defined as a drop of more than 10 percent from its recent peak.

Investors sold off shares in artificial intelligence companies after Democrats won key state and congressional races. Many Democratic candidates campaigned on platforms critical of AI data centers, raising concerns about future regulatory and political headwinds for the sector.

Major chipmakers led the decline. Nvidia, a key supplier of semiconductors for AI, saw its stock drop by 7 percent. Advanced Micro Devices fell 12 percent, while SanDisk shares plunged by more than 15 percent.

Other tech giants also retreated. Microsoft, which holds a large investment in OpenAI, lost over 2 percent of its value. Amazon, which has spent hundreds of billions of dollars on AI infrastructure, also saw its stock decline by more than 2 percent.

The Thursday selloff reversed the surge from Wednesday. The Dow had jumped 1,570 points, or 3 percent, on that day. That gain marked the index's best single-day performance since April 9, 2025.

Yorkville analyst Dan Ives warned of potential impacts on the tech sector following the elections. In a statement to ABC News, Ives described the Democratic wins in the Senate and House as a shift that would negatively affect the pace of AI development in the United States over the next several years. Democrats secured victories in Republican states such as Ohio and Texas, both of which host numerous AI data centers, and gained a comfortable majority in the House.

OpenAI responded to the market volatility by releasing new data center policies on Thursday. The company announced commitments to pay for all electricity and infrastructure used at its facilities. It also pledged to create a water plan for each site to protect local resources and to generate employment opportunities for local workers and businesses.