Stock Market Today: Nasdaq Falls as Qualcomm Plunges, AI Stocks Slide and Oil Prices Rebound
U.S. stocks were mixed on Thursday as renewed selling in semiconductor and AI stocks interrupted Wall Street's powerful post-election rally. The Dow Jones Industrial Average opened approximately 0.6% higher, while the S&P 500 slipped 0.1% and the tech-heavy Nasdaq Composite declined 0.8%. Qualcomm led the technology downturn after disappointing smartphone chip sales overshadowed its latest quarterly results.
The weakness followed Wednesday's broad market rally, when the Dow surged more than 1,500 points, or 3%, while the S&P 500 gained 1.6% and the Nasdaq climbed 1.4%. Investors were reassessing the implications of Democrats winning control of Congress in Tuesday's midterm elections, particularly for the rapidly expanding AI infrastructure industry. Meanwhile, oil prices rebounded after Wednesday's steep decline, and attention shifted toward Friday's employment report for fresh clues about the Federal Reserve's next move.
Market Movers:
- AppLovin (APP) +16.4%: Shares surged after the advertising technology company reported third-quarter revenue of $2.18 billion and adjusted earnings of $4.30 per share, exceeding Wall Street's expectations. Strong demand for its AI-powered advertising platform and an upbeat fourth-quarter revenue forecast helped fuel the rally.
- Qualcomm (QCOM) -13%: Shares plunged after the chipmaker reported a 26% decline in handset revenue to $5.14 billion, reflecting sluggish smartphone demand and pressure from higher memory costs. Investors also reacted negatively to its cautious fiscal first-quarter guidance despite continued growth in automotive chips.
- Snap (SNAP) -9.8%: Shares tumbled after the Snapchat parent reported third-quarter revenue of $1.72 billion, narrowly missing analysts' estimates. Daily active users also fell short of expectations, while advertising revenue growth slowed to 4%.
- Unity Software (U) +22%: Shares jumped after the software developer reported adjusted earnings of $0.44 per share, far exceeding the $0.03 analysts expected. Revenue increased 32% to $622 million, and the company issued a stronger-than-anticipated fourth-quarter outlook.
- EPAM Systems (EPAM) +13.6%: Shares rallied after the technology consulting company beat quarterly earnings expectations and raised its full-year outlook. Management also expanded its share repurchase authorization by $1.5 billion, adding support for the stock.
- Dutch Bros (BROS) -13.7%: Shares declined after the coffee chain issued disappointing annual revenue and adjusted EBITDA guidance despite slightly exceeding quarterly earnings expectations. Investors focused on the company's weaker growth outlook as it continues expanding its store network.
AI Stocks Slide as Election Results Raise New Questions
Semiconductor and data center stocks faced renewed pressure Thursday as investors considered how the midterm elections could affect the industry's expansion plans. Democrats' victories in several states where opposition to large data center projects has been growing raised concerns about additional regulatory scrutiny and potential construction delays. The weakness extended beyond Qualcomm, with Nvidia, AMD and other semiconductor companies struggling to maintain momentum.
UBS strategists warned that approximately 30% of data center capacity additions expected in 2028 could face delays or disruptions. That outlook weighed on companies supplying chips, computing equipment and infrastructure, even as established technology giants such as Amazon, Meta and Alphabet attracted buying interest. The divergence suggests investors are increasingly distinguishing between companies financing enormous AI projects and those positioned to benefit from more disciplined spending.
Oil Prices Rebound as Inflation Concerns Persist
Oil prices climbed Thursday after suffering their steepest decline in months during Wednesday's session. Brent crude rose more than 1% after falling over 8% the previous day, when easing political uncertainty and hopes for diplomatic progress in the Middle East helped lift stocks. The rebound served as a reminder that energy markets remain vulnerable to geopolitical developments and potential supply disruptions.
Elevated oil prices continue to complicate the inflation outlook, particularly as the Federal Reserve considers whether additional interest rate increases will be necessary. Higher energy costs can squeeze household budgets and raise operating expenses for businesses, potentially slowing economic activity. Although Wednesday's oil selloff provided temporary relief, investors remain cautious about whether the decline can be sustained.
Labor Market Data Puts the Fed Back in Focus
Fresh employment figures offered another sign of resilience in the U.S. economy. Initial unemployment claims fell to 189,000 last week, matching a multidecade low and suggesting that layoffs remain relatively limited despite elevated borrowing costs. However, companies continue to approach hiring cautiously as they navigate uncertainty surrounding economic growth, inflation and government policy.
Investors are now preparing for Friday's October employment report, which could influence expectations for the Fed's December meeting. A stronger-than-expected report could reinforce concerns that policymakers will keep interest rates elevated, while weaker hiring figures might ease pressure on Treasury yields. With technology valuations already sensitive to borrowing costs, the labor market's performance could play an important role in determining Wall Street's direction.
Looking Ahead
Wall Street's attention now turns to Friday's jobs report and the Federal Reserve's evolving interest rate outlook. Investors will also be watching whether semiconductor stocks can stabilize after Qualcomm's sharp decline and whether concerns about AI infrastructure spending continue to weigh on the broader technology sector. With oil prices rebounding and markets digesting the election results, volatility could remain elevated as investors reassess the outlook for corporate earnings and economic growth.
