Less than a day after President Trump celebrated “record highs” on Wall Street, U.S. markets delivered a reminder of how quickly the mood can turn.
What happened
- The S&P 500 plunged as much as 3.8% on Thursday, wiping out Wednesday’s post‑election rally and putting market circuit breakers back in focus. At the time of reporting the index had not yet hit a market-wide halt, but it would need to fall another roughly 3.2 percentage points from the intraday drop to trigger the first automatic pause.
- Wednesday’s strength had followed sweeping Democratic midterm wins: the S&P gained 1.6%—its biggest one‑day rise in three months—after investors cheered the election outcome. Trump had posted on Truth Social that “Stock Market just hit another Record High—91 Days in just a short period of time… Your 401(k)s are through the roof.”
Why traders watched circuit breakers
- The U.S. equity market uses three “circuit breaker” thresholds to slow panic selling by pausing trading when the S&P 500 drops by set amounts from the prior close:
- 7% decline → 7,150.41 points: would trigger a 15‑minute halt if reached before 3:25 p.m. ET.
- 13% decline → 6,689.09 points: would trigger a second 15‑minute suspension.
- 20% decline → 6,150.89 points: would close trading for the remainder of the day.
- Under NYSE rules the first two thresholds cease applying after 3:25 p.m. ET; the 20% level remains active for the full session. These measures apply market‑wide, including Nasdaq and other U.S. exchanges.
Sectors and names hit hardest
- Technology led the selloff. By about 11 a.m. ET the Nasdaq Composite had fallen nearly 5% while the S&P was down roughly 3.2%.
- Nvidia slid more than 6%, and the broader semiconductor index plunged roughly 11%.
- Stocks tied to AI infrastructure also came under pressure amid investor concern that Democratic victories could invite more scrutiny of rapid data‑center and AI buildouts. “We suspect there is going to be some scrutiny on this aggressive AI buildout,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank (via Reuters).
Spillover into crypto
- The rout spilled into crypto markets: Bitcoin dropped below $76,000, erasing its post‑election recovery. Decrypt reported roughly $428 million in leveraged crypto long positions were liquidated within an hour, underscoring how intertwined liquidations and volatility can be between equities and crypto.
What’s driving the move
- Beyond politics and sector rotation, investors are grappling with persistent inflation and uncertainty over the Federal Reserve’s next policy move. All eyes are on Friday’s October employment report for fresh clues on the trajectory of rates.
Bottom line
Thursday’s sharp selloff erased a fresh rally and raised circuit‑breaker nerves, hit tech and AI‑related names hardest, and forced significant deleveraging in crypto markets—highlighting how quickly cross‑asset sentiment can shift amid political, macroeconomic and policy uncertainty.
What happened
- The S&P 500 plunged as much as 3.8% on Thursday, wiping out Wednesday’s post‑election rally and putting market circuit breakers back in focus. At the time of reporting the index had not yet hit a market-wide halt, but it would need to fall another roughly 3.2 percentage points from the intraday drop to trigger the first automatic pause.
- Wednesday’s strength had followed sweeping Democratic midterm wins: the S&P gained 1.6%—its biggest one‑day rise in three months—after investors cheered the election outcome. Trump had posted on Truth Social that “Stock Market just hit another Record High—91 Days in just a short period of time… Your 401(k)s are through the roof.”
Why traders watched circuit breakers
- The U.S. equity market uses three “circuit breaker” thresholds to slow panic selling by pausing trading when the S&P 500 drops by set amounts from the prior close:
- 7% decline → 7,150.41 points: would trigger a 15‑minute halt if reached before 3:25 p.m. ET.
- 13% decline → 6,689.09 points: would trigger a second 15‑minute suspension.
- 20% decline → 6,150.89 points: would close trading for the remainder of the day.
- Under NYSE rules the first two thresholds cease applying after 3:25 p.m. ET; the 20% level remains active for the full session. These measures apply market‑wide, including Nasdaq and other U.S. exchanges.
Sectors and names hit hardest
- Technology led the selloff. By about 11 a.m. ET the Nasdaq Composite had fallen nearly 5% while the S&P was down roughly 3.2%.
- Nvidia slid more than 6%, and the broader semiconductor index plunged roughly 11%.
- Stocks tied to AI infrastructure also came under pressure amid investor concern that Democratic victories could invite more scrutiny of rapid data‑center and AI buildouts. “We suspect there is going to be some scrutiny on this aggressive AI buildout,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank (via Reuters).
Spillover into crypto
- The rout spilled into crypto markets: Bitcoin dropped below $76,000, erasing its post‑election recovery. Decrypt reported roughly $428 million in leveraged crypto long positions were liquidated within an hour, underscoring how intertwined liquidations and volatility can be between equities and crypto.
What’s driving the move
- Beyond politics and sector rotation, investors are grappling with persistent inflation and uncertainty over the Federal Reserve’s next policy move. All eyes are on Friday’s October employment report for fresh clues on the trajectory of rates.
Bottom line
Thursday’s sharp selloff erased a fresh rally and raised circuit‑breaker nerves, hit tech and AI‑related names hardest, and forced significant deleveraging in crypto markets—highlighting how quickly cross‑asset sentiment can shift amid political, macroeconomic and policy uncertainty.