Black Thursday. The S&P 500 lost $2.9 trillion of market value, the Nasdaq Composite's capitalization fell by $2.5 trillion, and the Magnificent Seven shed $1 trillion. These are among the largest figures in the history of the US stock market. The higher the climb, the greater the chance of a sharp fall — if not in percentage terms, then in absolute dollar losses. The taller the cabinet, the louder the crash.
Stock?index dynamics
No sector of the S&P 500 closed in the green. The VIX volatility index recorded its sharpest spike since April 2025; fear now dominates the US stock market amid severe shocks to the AI industry. Fears that Democrats will put roadblocks in front of tech companies are compounded by concerns that colossal AI investments are not paying off.
Formally, the trigger for the S&P 500 sell-off was disappointing corporate results from Qualcomm, a long-time chip supplier for Apple. In reality, investors' nerves were wound so tight that one relatively small company became the butterfly that set off a storm. The Philadelphia Semiconductor Index plunged more than 12% — the second-worst daily drop in its history. NVIDIA's largest decline since January 2025 wiped out all the issuer's gains for the year.
S&P 500 dynamics and equal-weight ETF performance
A day earlier, there had been rotation in the stock market: divided government was seen as a boon for the economy, with investors selling tech and buying other sectors. On Thursday, everything changed. It became clear that restrictions on building and commissioning data centres will hurt not only chipmakers. They will negatively affect construction and industrial firms, banks that financed projects, and the tech giants that use the chips.
Not only markets but the real economy will suffer. It's no surprise that the Nasdaq Composite has entered a correction — its 11th in the past decade — and has entered a bear market five times over that period. A bear market here means a 20% decline from record highs.
What's next? Nobody wants to catch falling daggers while the Middle East conflict continues and the Fed keeps tightening policy. On the other hand, a statement by the new Texas governor that commissioning of data centres in 2027–2028 is not off the table suggests the underlying case may still hold. Is fear really that overblown?
Technically, a breakout strategy worked on the S&P 500 daily chart. A break below the trading range of 7,650–7,720 allowed traders to enter short positions. As long as the broad index remains below the pivot resistance at 7,460, it makes sense to keep the focus on selling.