Nasdaq Plummeted 5.5% Amid AI Stocks Sell-off

The American Nasdaq Composite index fell by 5.52% on November 5, marking its steepest daily decline in 19 months. The sell-off affected chip manufacturers and companies related to artificial intelligence. Amid the stock market downturn, Bitcoin also lost more than 5%, dropping to $76,000.

Tech Companies Lead Market Decline

By the end of trading on November 5, the Nasdaq Composite fell to 24,315 points. The S&P 500 index lost 4.36%, ending the session at 7,353.73 points, while the Dow Jones Industrial Average dropped by 3.44%.

Semiconductor manufacturers suffered the most significant losses. Nvidia shares fell by 9.26%, AMD by 17.26%, and Micron Technology by 17.46%. The Philadelphia Semiconductor Index, which tracks the largest companies in the industry, declined by more than 12%.

As a result, the Nasdaq was more than 10% below the record level reached on October 6, which corresponds to a technical correction. The total market capitalization of S&P 500 companies shrank by approximately $3 trillion in one trading session.

Why Investors Are Selling AI Company Stocks

One of the factors in the sell-off was concerns about future investments in artificial intelligence infrastructure. After the midterm elections in the US, market participants began to consider the likelihood of increased regulation of data center construction, which could potentially slow the expansion of computing power.

Additional pressure came from doubts about the payback period of large-scale AI investments and the high valuation of tech company stocks. Investors were also revising expectations regarding the Federal Reserve's future monetary policy.

Bitcoin Declines Alongside Tech Sector

The sell-off in the American stock market was accompanied by a decline in cryptocurrencies. On November 5, Bitcoin fell to approximately $75,500, and by the close of trading in the US, it was around $76,000, losing more than 5% in a day.

The simultaneous decline in BTC and tech stocks indicates a worsening investor sentiment towards risk assets, but it does not prove a direct correlation between them. In periods of heightened uncertainty, market participants may reduce positions across multiple asset classes.

The future dynamics of Bitcoin will depend not only on the state of the Nasdaq but also on demand in the spot crypto market, capital flows into Bitcoin ETFs, and the overall liquidity of financial markets.