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A sharp US technology sell-off on November 5 cut the Nasdaq by as much as 6.4% in early trading and erased an estimated £2.2 trillion from the Nasdaq 100’s value. Tesla fell 11% and SpaceX 9%, while concerns about AI investment returns and possible constraints on data-centre development weighed on markets. The move raised market crash fears, but the report does not establish that a broader market crash is underway.
US technology shares plunged on Thursday, November 5, sending the Nasdaq down as much as 6.4% in early trading and wiping an estimated £2.2 trillion from the value of Nasdaq 100 companies, according to This Is Money. Tesla shares fell 11% and SpaceX shares fell 9%, adding to Elon Musk’s paper losses as investors reassessed the prospects for artificial-intelligence spending and the risk of a slowdown in data-centre construction.
The Nasdaq had fallen almost 15% from its October 6 record high, placing it in correction territory, commonly defined as a decline of at least 10% from a recent peak. The report put cumulative losses in the Nasdaq 100 since that high at £4.6 trillion. These are estimates of market value lost, not cash withdrawn from companies or a direct measure of individual investors’ losses.
The weakness spread beyond technology. The Dow Jones Industrial Average was down nearly 3% and the S&P 500 fell close to 4%, according to the report. In London, the FTSE 100 ended 0.4% lower, at 10,782.66, after earlier rising as high as 10,948. Its morning gains had brought it closer to its record of 10,989, but the US sell-off reversed the day’s direction.
Several large technology stocks recorded steep declines. Nvidia fell 8%, SanDisk 17%, Advanced Micro Devices nearly 15% and Micron Technology 14%, This Is Money reported. The Vix volatility index, often called Wall Street’s “fear gauge,” briefly rose by almost 70% in early trading and touched 28, before retreating. It opened at 17 and remained below half the level reached during the market reaction to President Donald Trump’s “Liberation Day” tariffs in April 2025.
AI Spending Faces a Market Test
The sell-off shows how quickly doubts about AI investment returns can affect technology shares and markets beyond the sector. Companies and investors have committed large sums to AI infrastructure, including data centres and related hardware. If buyers become less confident that this spending will generate adequate returns, valuations of chipmakers and other companies tied to the build-out may come under pressure.
Political uncertainty added to those concerns. The report said investors were weighing whether Democrat victories in the US midterm elections could slow AI infrastructure development amid opposition to data centres. The market move does not, by itself, establish that construction will be curtailed or that AI investment will fail to pay off. It does show that expectations about both earnings and policy have become sensitive factors for investors.
For people with exposure to shares or funds, the declines underline the risk that losses in a concentrated sector can coincide with falls across broader indexes. A drop into correction territory is a market measure, not proof that a crash is underway. Share prices and volatility can move sharply in either direction, and investors can lose money.
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From Election Gains to Reversal
The market decline followed gains in the immediate aftermath of the US midterm elections, according to This Is Money. On November 5, technology shares reversed course as investors considered both the political outlook for data centres and whether the extensive spending on AI infrastructure would produce returns matching market expectations.
The impact reached the UK despite the FTSE 100’s comparatively limited exposure to large US technology firms. Dan Coatsworth, head of markets at AJ Bell, said the index could still reach 11,000 in the coming days or weeks, but added that the US technology sell-off had scuppered its chances of doing so that day. The index closed 46.55 points lower after giving up its earlier advance.
The Vix’s rise reflected increased demand for protection against market swings, but its retreat from the intraday high and its lower level relative to April 2025 offer perspective on the day’s volatility. The report provides a snapshot of trading on November 5; it does not establish whether the declines will persist.
“A big US tech sell-off has spooked investors, however, and that has scuppered the FTSE 100’s chances today.”
— Dan Coatsworth, head of markets at AJ Bell
Crash Fears Are Not Confirmation
The report documents a severe one-day sell-off and a nearly 15% Nasdaq decline from its October 6 peak, but does not confirm that a wider market crash has begun. It is also unclear from the available information whether the November 5 declines will continue, or how much of the change in Musk’s personal wealth is attributable to the reported share-price falls. The article describes losses in his companies’ shares, not a precise calculation of his net-worth change.
The possible effect of election results on AI infrastructure is presented as an investor concern, not as a confirmed policy outcome. No specific restrictions on data-centre construction, revised spending plans or updated company earnings forecasts are provided. The figures are reported at a particular point in a volatile trading session and may change as markets move.
Watch Trading and AI Plans
The next indications will come from subsequent trading sessions and any company or government statements that clarify AI investment plans, data-centre development and related policy. Further market data would show whether the Nasdaq’s correction deepens or whether prices recover; the November 5 report does not provide a forecast.
Investors will also be watching whether weakness remains concentrated in technology or continues to affect broader indexes. The FTSE 100’s reversal illustrates how a sharp US sell-off can influence markets elsewhere, even when local indexes have less direct exposure to large technology companies.
Key Questions
How far had the Nasdaq fallen from its peak?
The report said the Nasdaq had fallen almost 15% from its October 6 record high. A decline of at least 10% is commonly described as a correction.
How did Tesla and SpaceX shares perform?
According to This Is Money, Tesla fell 11% and SpaceX fell 9% during the reported sell-off. The article did not give a precise calculation of Musk’s total personal losses.
What drove the technology sell-off?
The report pointed to investor concerns about whether large AI infrastructure investments will generate sufficient returns, as well as uncertainty over possible opposition to data centres after US midterm election results. These were reported as market concerns, not confirmed policy changes.
Does the Nasdaq decline mean a market crash has started?
No. The report said the Nasdaq was in correction territory, down almost 15% from its peak. That describes the size of the decline; it does not establish that a broader market crash is underway.
Source: thisismoney.co.uk
