Nasdaq Correction Hits With 5.5% Drop, S&P 500 Falls 4.4% on AI Sell-Off

Stock futures declined significantly after a large sell-off in artificial intelligence-related stocks pushed the Nasdaq Composite into correction territory. Nasdaq-100 futures dropped 0.8%, S&P 500 futures fell 0.6%, and Dow Jones Industrial Average futures lost 291 points (0.6%).

During Thursday's regular session, the Nasdaq Composite fell 5.5%, closing more than 10% below its recent high, marking a correction. The S&P 500 declined 4.4%, and the Dow fell by over 1,800 points (3.4%). All 11 S&P 500 sectors closed in negative territory, with AI-related companies hit hardest. For example, Micron Technology and Advanced Micro Devices each lost 17%, CoreWeave dropped 10%, and Nvidia declined 9%, turning negative for 2026. The group of top tech stocks known as the Magnificent Seven lost over $1 trillion in market value.

The three major indexes are set for losses on the week, with the Nasdaq down 4.4% and the S&P 500 nearly 3% lower. The Dow has underperformed less, down 0.5% week to date. Analysts highlight a potential buying opportunity amid this volatile trading, especially in memory stocks, noting ongoing concerns over data center construction due to political developments. Investors are also awaiting the October payrolls report, expected to show 59,000 new jobs added and unemployment steady at 4.2%, which could influence market direction.

This correction is significant for investors because it shows how sensitive the market is to sector-specific risks like AI investments and signals potential shifts in economic growth expectations through job data.