Closing Bell: U.S. Tech Drawdown Spreads Across Equities

U.S. equities plunged Thursday, reversing midterm election euphoria with a sharp selloff led by memory and semiconductor stocks in the tech sector. 

The Nasdaq-100 (NDX) fell 6.36%, erasing $2.3 trillion in market value and marking its biggest drop since April 2025. The PHLX Semiconductor Index (SOX) slumped more than 12%. Nvidia (NVDA) shares were down 9%, while SanDisk (SNDK) fell 22% and Western digital (WDC) slid 18%. 

The S&P 500 (SPX) was down 4.4%, with every sector declining. Only Consumer Staples and Utilities slipped less than 1%. The Dow Jones Industrial Average ($DJI) was off by 3.4%, and the small-cap Russell 2000 (RUT) was off by 4.4%. 

The price of WTI crude oil also reversed course with a rise of 3.3% to near $91 per barrel Thursday afternoon. Shares of ConocoPhillips (COP) sank 1% after it reported higher earnings and revenue and raised its quarterly dividend. 

Five things to watch from Thursday's market action: 

Microsoft Reassesses Neocloud Deals, Tightens Oversight of IREN, Nebius & Nscale 

Microsoft is reportedly tightening oversight of data center projects involving IREN (IREN), Nebius (NBIS), and Nscale as it reassesses its reliance on neocloud providers, according to Bloomberg. Microsoft is prioritizing expansion of its own data centers and stepping away from projects it considers higher risk, though it has not ruled out future neocloud deals. According to the report, Microsoft and IREN have also negotiated a revised timeline that could delay IREN’s Texas project by several weeks or months, while Microsoft has decided not to exercise an option to more than double its existing Nscale agreement. 

Iren Reports Mixed Earnings, AI Roadmap Remains on Track 

IREN, one of the neocloud players in the AI space, has come under pressure over the past several weeks and reported earnings after the close. The company posted strong fiscal Q1 growth, with AI Cloud revenue nearly tripling, sequentially, to $200 million and total revenue rising 66% to $228 million. Adjusted EBITDA of $66 million missed expectations, but the company said its $4 billion annual recurring revenue target is fully contracted and funded, with operations expected to reach that level by early 2027. Shares jumped more than 11% in after-hours trading. 

Cloudflare Earnings Beat Estimates 

Cloudflare (NET) reported a strong third quarter with revenue and adjusted earnings numbers that exceeded analyst estimates, and guidance well above expectations. Adjusted earnings were 38 cents per share versus expectations for 34 cents. Revenue was $782.5 million, versus about $737 million expected. Cloudflare shares were rising in after-hours trading. See Cloudflare (NET) Reports Earnings Thursday Amid Cybersecurity Swoon and Options Corner: Forecast for Cloudflare into Earnings, NET Example Trade  

Airbnb (ABNB) Beats Q3 Expectations, Issues Strong Q4 Outlook 

Airbnb (ABNB) reported a strong third quarter, with revenue of $4.87 billion topping expectations of $4.75 billion and gross booking value of $27.7 billion exceeding estimates of $26.21 billion. Nights and seats booked rose 16% to 155 million, while first-time booker growth accelerated to 13%, its strongest pace since early 2022. Airbnb also plans to begin rolling out its own AI travel agent in the first half of 2027 to help guests plan and book trips. 

The biggest moves among S&P 500 stocks Thursday: 

Advancers: 

• AppLovin Corp (APP) 29.53% 
• Airbnb Inc (ABNB) 7.65% 
• Tapestry Inc (TPR) 7.01% 
• Verisk Analytics Inc (VRSK) 6.88% 
• Corpay Inc (CPAY) 6.66% 

 Decliners 

• Axon Enterprise Inc (AXON) -22.75% 
• SanDisk Corp (SNDK) -21.82% 
• Lumentum Holdings Inc (LITE) -19.01% 
• Western Digital Corp (WDC) -18.05% 
• Advanced Micro Devices (AMD) -17.55% 

Also see:  

NDX Biggest Drop Since April 2025: How SOX, NVDA & SPX Say About Selling Action  

APP Surges After Earnings as NDX Tumbles Amid High AI Volatility  

Lee: Sell-Off Focused on Wrong Part of Government as AI Data Center 'Battle' Brews  

Kenny Polcari on Why 24,000 NDX is Possible, AI Volatility & SPX Equal Weight Strength 

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