US stocks opened lower on Thursday, with the Nasdaq under pressure as chipmakers and data centre-related stocks extended their declines for a second session.
Investors continued to assess the potential impact of Democrats’ sweeping midterm election victory on artificial intelligence (AI) infrastructure spending and regulation.
The Dow Jones Industrial Average gained 212 points while the S&P 500 fell 0.53%. The Nasdaq Composite fell 1.41%.
The moves followed a strong rally on Wednesday, when the Dow surged more than 1,500 points, and the S&P 500 and Nasdaq Composite each gained more than 1%.
Democrats secured majorities in both chambers of Congress, easing some political uncertainty and prompting investors to rotate towards stocks outside the technology sector.
Chipmakers and data centre stocks remain under pressure
Qualcomm shares fell sharply in trading after the company reported fourth-quarter results and issued an outlook that disappointed investors.
The chipmaker fell short of Wall Street expectations for smartphone chip sales, citing sluggish demand and declining revenue linked to Apple.
Qualcomm shares dropped 10% in trading.
Other semiconductor stocks also extended their losses.
Nvidia fell 3%, while Marvell Technology declined 6.1% and Intel slipped 5.56%.
Broadcom also traded 4.2% lower.
The weakness extended to companies involved in the AI infrastructure buildout.
Data centre operators IREN, Hut 8 and Applied Digital fell between 2% and 7%, while CoreWeave and Nebius declined between 4% and 8%.
GE Vernova and Constellation Energy, which have exposure to the data centre boom through energy and equipment supply, also traded lower.
Dell shares dropped more than 7%.
Investors are assessing whether Democratic control of Congress and victories in key states could lead to tighter restrictions on data centre construction.
Texas, Georgia and Ohio are among the important locations for the industry’s expansion.
Big technology stocks and financials gain
While chipmakers and infrastructure suppliers struggled, several large technology companies continued to advance.
Amazon shares rose around 1.4% in trading, while Alphabet gained approximately 1%.
The rotation reflects expectations that a slower pace of AI infrastructure expansion could reduce capital expenditure requirements for major technology companies, potentially benefiting businesses with substantial financial resources and diversified operations.
Financial stocks also supported Dow.
JPMorgan Chase and American Express each gained more than 1% in trading.
Elsewhere, AppLovin shares surged around 30% after the advertising technology company reported better-than-expected third-quarter profit and issued an upbeat outlook.
By contrast, Tesla and SpaceX extended their losses, falling more than 5% each.
Oil rebounds as investors await economic data
Oil prices reversed part of Wednesday’s sharp decline. West Texas Intermediate crude futures rose more than 1% to $89.72 a barrel, while Brent crude gained around 2.9% to above $97.
The rebound followed an 8% decline in the previous session, when markets assessed the possibility that Democrats could increase pressure on the Trump administration to end the Iran war.
Oil prices have remained volatile amid concerns about potential supply disruptions in the Middle East.
Investors are also monitoring comments from Federal Reserve officials, including Richmond Fed President Thomas Barkin, ahead of the October US jobs report scheduled for Friday.
AI disclosure: AI tools assisted with research and drafting of this piece. An Invezz editor reviewed the facts, sources and wording before publication. Any opinions or analysis are Invezz’s, not those of an automated system.
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