Tech sell-off sends markets tumbling, erasing trillions in value

The Nasdaq Composite experienced a decline of over 5%, entering correction territory. The Dow Jones Industrial Average dropped more than 1,800 points, a decrease exceeding 3%, while the S&P 500 retreated by more than 4%. These losses erased the gains made during Wednesday’s post-election rally.

Key statistics from the day’s trading include the Nasdaq Composite’s worst performance since April 4, 2025, with a 5.82% drop. The S&P 500 also saw its worst single-day performance since that date, declining 5.97%. The Dow Jones Industrial Average registered its largest point drop since April 4, 2025, losing over 2,200 points, or 5.5%.

The ‘Magnificent Seven’ group of tech companies collectively lost more than $1 trillion in market value, with Nvidia accounting for over $440 billion of that loss. Nvidia’s stock fell by more than 9%, pushing its year-to-date performance into negative territory, down 2.6%.

The CBOE Volatility Index (VIX) surged, reaching its highest level since March 31, gaining 11.57 points – the largest single-day increase since April 4, 2025. On a percentage basis, the VIX climbed 69.66%, marking the third-largest gain on record since 1990.

The New York Stock Exchange saw a ratio of nearly 6 to 1 between declining and advancing stocks (2,344 to 416). A similar trend was observed on the Nasdaq Composite, with a ratio of almost 5 to 1 (4,166 declining versus 855 advancing).

All 11 sectors within the S&P 500 closed in the negative, with information technology experiencing the most significant decline at 7.30%, its worst daily performance since March 16, 2020. Industrials also suffered a notable drop, their worst daily performance since April 4, 2025.

Trading volume for the Technology Select Sector SPDR Fund (XLK) was unusually high, exceeding three times the 30-day average.

A significant portion of S&P 500 stocks are now trading below their 52-week highs, with 174 stocks (34.6%) down by 20% or more, and 310 stocks (61.6%) down by 10% or more. Similarly, a majority of Nasdaq-100 stocks are also below their 52-week highs.