Gathering AI storm clouds doom tech stocks to darkest day in a year

Big tech stocks slumped Thursday, putting them on track for their biggest decline since the "Liberation Day" rout last year, the most significant shakeout yet in what has been a punishing autumn for the AI trade. The Nasdaq 100 index was set for market-value declines exceeding $2 trillion on investor fears that the Democratic Party's sweeping midterm victorycould stall AI infrastructure expansion and force a chaotic reckoning for smaller firms whose capacity to raise funds has already been limited by higher interest rates and tighter financial conditions. Analysts and portfolio managers said declines in once-hot areas such as semiconductors and AI infrastructure weren't entirely surprising, given the scale of earlier gains in many of these stocks and the financing concerns that have shadowed the so-called neoclouds, smaller infrastructure firms such as Nebius and CoreWeave, since US interest rates rose late in the summer. But many said the scale of the declines for a second straight day suggest a change in sentiment that could portend further selling. "Despite the magnitude of today’s