Artificial intelligence earthquake in US stock markets

A technology-focused sales wave left its mark on the US stock markets.

Dow Jones index ended the day with a 3.44 percent decrease. The loss in the S&P 500 was 4.36 percent. Nasdaq, which is dominated by technology stocks, fell 5.52 percent.

Nasdaq has moved away from the record closing level seen on October 6 by more than 10 percent and entered the technical correction zone. The index thus recorded its sharpest daily decline since the tariff decisions in April 2025. The S&P 500 also had its worst daily performance since the same period.

THE RETURN ON ARTIFICIAL INTELLIGENCE INVESTMENTS IS QUESTIONED

At the center of the sales wave were concerns about when the huge budgets allocated by technology giants to artificial intelligence infrastructure would turn into income and profit.

Multibillion-dollar investment plans for data centers, processors and artificial intelligence infrastructure of major technology companies such as Microsoft, Alphabet, Amazon and Meta are increasing debates about the payback period of these expenditures.

In technology stocks, which have recently recorded strong rises with the expectation of growth in the field of artificial intelligence, it has begun to be questioned to what extent high valuations can be supported by current investment expenditures.

While investors expect the demand for artificial intelligence services to grow, on the other hand, they evaluate the impact of infrastructure expenditures to meet this demand on companies' cash flow and profitability. The possibility of a slowdown in data center investments puts pressure not only on technology giants, but also on companies that provide chips, memory, servers and energy to this infrastructure.

DOUBLE-DIGITAL LOSSES AT CHIP MANUFACTURERS

Concerns about artificial intelligence investments have priced much harder into shares of chip makers. While AMD shares decreased by 17.26 percent, the decrease in Nvidia was 9.26 percent. Intel shares also lost 10.33 percent.

Selling pressure was also effective in other companies in the memory and semiconductor industry. The Philadelphia Semiconductor Index lost up to 11 percent on the day. Qualcomm's outlook for smartphone chip sales, which was below expectations, also strengthened the negative atmosphere in the industry.

Qualcomm shares lost 9.49 percent on the day.

Investors are pricing that if data center investments slow down, demand for artificial intelligence chips, memory products and server equipment may also suffer.

ELON MUSK'S COMPANIES WERE ALSO AFFECTED BY THE SELLING WAVE

The sales wave also dealt a heavy blow to Elon Musk's companies. Tesla shares decreased by 10.77 percent and SpaceX shares decreased by 9.05 percent.

Both companies' investments in Texas and ties to artificial intelligence infrastructure have raised regulatory concerns raised in the wake of the election results. SpaceX's investments in artificial intelligence computing capacity and Tesla's energy storage activities also make companies sensitive to developments in the data center ecosystem.

The fact that Musk spent nearly half a billion dollars to support Republican candidates in the midterm elections also attracted attention in terms of the possible effects of political developments on his companies.

FEAR INDEX INCREASED BY 66 PERCENT

The sharp sell-off in the stock markets was also reflected in the risk perception of investors. CBOE Volatility Index (VIX), known as Wall Street's fear index, rose 69 percent.

VIX reached 28.09 during the day, reaching its highest level in 8 months. The rise in the index indicated that investors expected higher volatility in the markets in the coming period and the demand for hedging increased.

The increase in the VIX was recorded as the sharpest increase since the market turmoil following US President Donald Trump's statements on tariffs in April 2025.

DEMOCRATS' ELECTION VICTORY RAISE REGULATION CONCERNS

The results of the midterm elections held in the USA on November 3 were effective in the sales in the markets. The fact that Democrats gained the majority in both the House of Representatives and the Senate raised the expectation that regulations for the artificial intelligence sector might tighten.

In particular, the election of some Democratic candidates who opposed the establishment of new data centers increased the question marks regarding the future of investments in the sector.

It is evaluated that possible restrictions on the establishment of data centers may negatively affect the demand for artificial intelligence chips, energy and other infrastructure services.