Tech Stocks Plunge as Weak Qualcomm Earnings and AI Policy Fears Hit Markets

Market Decline

Traders dumped tech stocks and all three US benchmark indices fell on Thursday after weak earnings from Qualcomm and worries that a Democrat‑controlled Congress could slow AI investment. Concerns about AI’s future also roiled markets worldwide. The Dow Jones Industrial Average dropped 2.2%, the S&P 500 slipped 3.4% and the Nasdaq Composite fell 5.2%, putting the tech‑heavy Nasdaq on track to confirm a correction from its record closing high. The slide marked the first time since last year that all three major indices posted double‑digit losses in a single session.

Sector Impact

Weak results from the semiconductor giant Qualcomm sparked the sell‑off, while investors fretted about possible cuts to AI infrastructure spending under the new Congress. Technology stocks were the worst‑performing group in the S&P 500, leading the fall across sectors. The Philadelphia Semiconductor Index slumped 11%, the sharpest drop among all listed groups. Analysts said the market reaction reflects how heavily the US economy has relied on record AI spending to sustain growth amid global uncertainty and multiple wars.

Context

Record AI spending has become a key driver of US economic growth, so any policy shift that could curb funding tends to spook investors. A shift to a Democrat‑controlled Congress adds uncertainty about future AI investment plans, making markets more sensitive to earnings news from chip makers.