Overview
- A sharp sell-off on Thursday erased about $2.5 trillion of market value as stocks tied to AI and data centers plunged and major indexes fell: the Nasdaq dropped roughly 5.5%, the S&P 500 about 4.4% and the Dow lost more than 1,800 points.
- Markets recovered roughly one‑third of Thursday’s losses the next session but remained cautious because political and regulatory risk could slow new data‑center builds and change future revenue for chipmakers and cloud providers.
- Credit markets have been signaling stress: roughly $500 billion of AI‑linked debt was placed in 2026 and some companies saw sharply wider CDS spreads as lenders began to price balance‑sheet risk more strictly.
- Semiconductor and AI‑supply firms took the brunt of the move with memory and chip names plunging double digits, a pattern that reflects investor worry about the pace of future demand tied to new data‑center construction.
- A developing internal probe related to Nvidia’s chief executive adds fresh uncertainty, while strategists urge investors to diversify holdings and watch upcoming U.S. inflation and Fed decisions as the next potential market drivers.