Chipmakers plunge and wipe out yesterday's election rally

Thursday, November 5 flipped yesterday's Euphoric election close into a Bleeding session. Futures were mixed before the open with chips already soft after Qualcomm and Arm, then the selling accelerated through the morning and never found a bid. By the close the S&P proxy was down about 4.4%, the Nasdaq proxy about 6.4%, small caps about 4.6% and the Dow proxy about 3.5%, with the vol proxy up about 30.7%.

The move was broad, but the chipmakers did the damage. The chip ETF fell about 11.6%, AMD about 17.7%, Micron about 17.2%, Arm about 13.1%, Qualcomm about 9.4% and Nvidia about 9.3%. Tech was the worst sector group at about −8.0%. The equal-weight S&P fell about 2.9%, beating the index by about 1.5 points, so the average stock still held up better than the megacaps even as everything fell. AppLovin rose about 31.1% after Wednesday's beat. Crude rose about 1.9%, gold about 0.8% and long Treasuries about 0.2%, while Bitcoin slipped about 5.6%.

Weekly jobless claims printed 189,000 against a 196,000 estimate and a prior revised to 195,000, street-reported, and the tape ignored the softer print. ConocoPhillips earned $3.27 a share against about $3.04 and fell about 1.0%, while Sony rose about 6.1% after a beat and a higher outlook, both street-reported. After the close, Cloudflare earned $0.38 against $0.35, guided fourth-quarter revenue to $845 million to $846 million against about $799 million, and is up about 13.9%. Airbnb earned $3.16 against about $2.85 to $2.91 and is up about 10.8%. Atlassian beat on earnings but is down about 15.8%, and Axon missed at $1.72 against $1.88 and is down about 12.6%, all street-reported.

Research

Wires and posts say the Democratic sweep is being re-read as a risk to AI data-center buildouts in key states, after Wednesday priced it as gridlock and a faster path to ending the Iran war. Qualcomm's handset warning from Wednesday and Arm's soft reaction kept the chip complex under pressure into a second session. Options had priced about 10.6% for Cloudflare and about 6.7% for Airbnb; both cleared those bands after hours.

What X is saying

Posts say the chip selloff is the main driver, with some tying it to fears Democrats will slow data-center permits after the midterm sweep. Others call it a hangover from Qualcomm and Arm, and from a week that already punished AI spenders. Some posts note that the equal-weight S&P is still falling less than the Nasdaq proxy, keeping the average-stock story alive even on a Bleeding day.

Insight

Yesterday's election bid lasted one session. Today the market sold the same story from the other side: chipmakers and AI infrastructure names led a broad decline while the average stock still lost less than the index. Soft jobless claims did not rescue risk. Friday's October employment report at 8:30 AM ET is the next test of whether the selling stays in chips or spreads further.