Losses in semiconductor shares intensified as investors weighed how a potential Democratic sweep of Congress could affect the AI trade, a key driver of the U.S. stock market bull run.
An index tracking chipmaking giants has now fallen 35% from its record high set in June.
Forward guidance from Qualcomm and Arm Holdings failed to impress Wall Street.
The Nasdaq 100 Index slid 3.5%.
Separately, Apple plans to raise roughly $7 billion through an investment-grade bond sale to help fund share buybacks, adding to a recent wave of debt issuance by major U.S. technology companies. Tesla shares dropped 10%.
Most S&P 500 Stocks Rise Despite Chip Rout
Even as chip stocks tumbled, a majority of S&P 500 constituents advanced as capital rotated toward more defensive sectors.
Ahead of the U.S. jobs report, investors flocked to safe-haven assets, pushing Treasury prices higher. Brent crude climbed to $97 a barrel.
After the U.S. midterm elections, oil prices plunged sharply in the previous session, and traders are now reassessing the market landscape.
Bob Edwards of Edwards Asset Management said that while the AI trade remains alive, market money has begun shifting toward value-oriented stocks and dividend-paying sectors.
He said, "The AI trade isn't going away, but volatility remains elevated, and investors shouldn't overlook some of the more mundane areas of the market. We're not worried about what a so-called 'blue wave' could mean for AI infrastructure buildout, because the president still holds veto power, and data centers bring jobs and tax revenue."
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