Wall Street’s artificial intelligence investment boom faced a major reality check on Thursday as semiconductor stocks collapsed, the Nasdaq Composite entered correction territory and investors questioned whether enormous AI infrastructure investments could generate expected returns. The selloff erased approximately $2.9 trillion in market value from S&P 500 companies, with political opposition to data-centre construction adding risk to a weakening technology rally. The Nasdaq Composite plunged 1,421.52 points, or 5.52%, to close at 24,315.00, its biggest one-day percentage decline in 19 months, ending approximately 11.9% below its October 6 record closing high. The S&P 500 dropped 334.89 points, or 4.36%, to 7,353.73, while the Dow Jones Industrial Average tumbled 1,833.06 points, or 3.44%, to 51,523.06. The Nasdaq-100 fell 6.4%, wiping out approximately $2.5 trillion in market value, while the Magnificent Seven technology companies collectively lost an estimated $1.04 trillion. Thursday’s rout was not simply a reaction to the November 3 US midterm election results; concerns about returns on AI capital expenditure, weaker semiconductor earnings signals, tighter financing conditions and aggressive institutional selling had already been building. The election results intensified pressures by introducing uncertainty over how quickly new data centres could receive approval and become operational. The Philadelphia Semiconductor Index plunged 12.