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Wall Street Suffers a Brutal Selloff

Chip stocks led a brutal Wall Street selloff, with the SOX plunging 12.2% and Nasdaq sinking 5.52%.

Author

Elie Zakhour
November 06, 2026

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AI Selloff Sends Nasdaq Into Correction

Wall Street's post-election rally came to an abrupt end Thursday as a sharp selloff in technology and AI-related stocks wiped out Wednesday's gains and then some. The S&P 500 plunged 4.36% to 7,353.73, the Nasdaq Composite sank 5.52% to 24,315, and the Dow dropped 1,833 points, or 3.44%. It was the S&P 500's worst session since April 2025, while the Nasdaq officially entered correction territory, closing nearly 12% below its October 6 record.

At the center of the selloff were growing concerns about the pace of AI infrastructure spending. Following Tuesday's midterm elections, investors weighed the possibility that tighter regulation and opposition to new data centers could slow construction. Those concerns added to existing questions about elevated tech valuations and how quickly massive AI investments will translate into profits.

Semiconductor stocks took the biggest hit, with the Philadelphia Semiconductor Index tumbling 12.2%. Nvidia fell 9.3%, AMD plunged 17.3%, Micron dropped 17.5%, and Sandisk sank more than 22%. Qualcomm also lost 9.5% after its quarterly smartphone chip sales missed Wall Street expectations.

The weakness extended beyond chipmakers. Data-center operators and power infrastructure companies also declined, with CoreWeave falling 9.8% and GE Vernova losing 7.5%. All 11 S&P 500 sectors finished lower, with technology leading the losses.

Still, some companies managed to stand out. AppLovin surged 31% after reporting a 55% jump in quarterly revenue to $2.18 billion, beating earnings expectations and expanding its share-buyback authorization. Tapestry climbed 7.1% after delivering stronger-than-expected quarterly results and raising its full-year outlook.

Meanwhile, the broader economic picture remained mixed. Brent crude rebounded 3.88% to $98.29 a barrel after renewed tanker attacks raised concerns about Middle East oil supplies. The 10-year Treasury yield fell to approximately 4.84% as investors sought safer assets, even as weekly jobless claims declined to 189,000 and third-quarter productivity exceeded expectations.

Attention now turns to Friday's October jobs report, which could influence expectations for the Federal Reserve's next interest-rate decision.

Peel Take: Thursday's selloff highlighted how dependent parts of the market have become on continued AI infrastructure expansion. Concerns about potential delays were enough to put significant pressure on chipmakers, data-center operators, and related companies. Strong earnings still rewarded individual stocks, as AppLovin demonstrated, but they weren't enough to offset the broader retreat. With the Nasdaq now in correction territory, investors face a fresh test of whether the growth expectations behind AI valuations can hold up.

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What's Ripe

AppLovin (APP) 31.04% 

  • AppLovin surged 31.04% after the advertising technology company reported record third-quarter revenue of $2.18 billion, up 55% year over year, while net income jumped 72% to $1.44 billion.

  • The company also forecast fourth-quarter revenue of $2.365 billion to $2.395 billion, above analysts' expectations, and increased its share-buyback authorization by $3.2 billion to $3.6 billion.

  • Peel Take: While Wall Street was dumping AI stocks, AppLovin gave investors a reason to buy. Its AI-powered advertising business is delivering strong revenue growth, substantial profits, and cash flow to support buybacks. In a market increasingly questioning AI returns, actual earnings still carry plenty of weight.

Tapestry Inc. (TPR) 7.07% 

  • Tapestry climbed 7.07% after the Coach and Kate Spade parent reported fiscal first-quarter revenue of $1.89 billion, up 11%, while adjusted earnings rose 32% to $1.82 per share, beating expectations.

  • Coach sales grew 16%, supported by strong demand from younger shoppers and 43% revenue growth in Greater China. Tapestry also raised its fiscal 2027 revenue and earnings forecasts.

  • Peel Take: Apparently, consumers still have room in their budgets for a Coach handbag. While much of Wall Street was selling, Tapestry showed that strong brands can still deliver growth despite broader market uncertainty. The catch? Kate Spade sales fell 10%, leaving Coach to do most of the heavy lifting.

What's Rotten

Sandisk Corp. (SNDK) 22.26%

  • Sandisk plunged 22.26% to $806.43, making it the S&P 500's worst performer, as a broad selloff in semiconductor and memory stocks intensified amid concerns about the future of AI infrastructure spending.

  • The decline came amid a broader selloff in AI-linked semiconductor and storage stocks, as investors reassessed elevated valuations and the outlook for data-center spending. Micron fell 17.46%, while Western Digital dropped 17.35%.

  • Peel Take: Sandisk went from riding the AI boom to taking one of the market's hardest hits. The company's growth prospects remain tied to strong demand for data storage, but investors are questioning how long the infrastructure spending spree can continue. When expectations are sky-high, even the possibility of slower growth can send shares tumbling.

Qualcomm Inc. (QCOM) 9.49%

  • Qualcomm sank 9.49% after its fiscal fourth-quarter smartphone chip sales missed Wall Street's expectations, raising concerns about slowing handset demand and declining revenue from Apple.

  • Revenue from its handset business fell 26% year over year to $5.14 billion, while overall chip segment revenue declined 8% to $9.02 billion. At least 10 brokerages lowered their price targets following the results.

  • Peel Take: Qualcomm is expanding into AI data centers and automotive chips, but smartphones still account for a substantial portion of its business. Strong growth in newer markets is encouraging, yet it hasn't been enough to offset weakness in handsets. Investors want to see those newer businesses make a bigger contribution to earnings before giving the company more credit for its AI ambitions.

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