Wall Street experienced a sharp reversal on Thursday as U.S. stocks plunged, wiping out the previous session's strong rally and reigniting concerns about the economic consequences of the Iran war and growing uncertainty across financial markets.
The S&P 500 dropped 3.2%, marking its steepest daily decline since the market turmoil triggered by President Donald Trump's tariff announcements in 2025. The Dow Jones Industrial Average plunged 1,079 points, while the technology-heavy Nasdaq Composite fell 4.9%. The scale of the decline turned Thursday into one of the most difficult trading sessions for U.S. investors in recent months.
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However, the sell-off was not driven by geopolitical concerns alone. Artificial intelligence and semiconductor stocks were at the center of the market downturn. Nvidia shares fell 6.3%, Advanced Micro Devices plunged 13.1%, and cloud-computing company CoreWeave lost 10%. Growing concerns about the cost of financing AI infrastructure and the possibility of restrictions on new data-center construction intensified selling pressure.
The political consequences of the U.S. midterm elections have also become part of the market equation. Democratic victories have raised the possibility of increased government scrutiny of AI infrastructure projects, potentially slowing the expansion of data centers. Investors are now reassessing the outlook for companies that have attracted enormous valuations based on expectations of continued AI investment.
The latest decline also erased the optimism that had lifted Wall Street during Wednesday's trading session, when the Dow surged more than 1,500 points following the election results. That rally had been supported by hopes that political uncertainty would ease and that the change in congressional power could increase pressure for a resolution to the Iran conflict.
Meanwhile, developments in the Middle East continue to influence energy markets. Brent crude rose 2.5% on Thursday to approximately $96.95 per barrel, recovering part of its sharp decline in the previous session. Uncertainty over the duration of the Iran war and the potential disruption of global energy supplies remains a significant concern for investors.
The combination of geopolitical risks, elevated energy prices and pressure on high-valued technology companies has created a difficult environment for financial markets. Higher energy costs could reinforce inflationary pressure, while expensive borrowing conditions may make it harder for technology companies to sustain their massive investment plans.
Although reports have pointed to losses exceeding $1 trillion in previous technology-sector sell-offs, the latest available market figures do not independently confirm that Wall Street lost more than $1 trillion in total market capitalization during Thursday's session. What is clear is that the major U.S. indexes suffered substantial declines, with AI-related stocks accounting for a significant share of the damage.
For investors, the central question is whether Thursday's collapse represents a temporary correction in technology valuations or the beginning of a broader period of market instability. The direction of oil prices, developments in the Iran conflict and the future of AI investment will remain among the most important factors shaping Wall Street's next moves.
