The Nasdaq Composite fell around 3% on November 5 as renewed selling in technology and semiconductor stocks erased much of Wall Street's recent gains. Nvidia, AMD, and other AI-linked stocks came under pressure, shifting attention to Friday's US jobs report, which could influence interest-rate expectations and determine whether technology stocks face another round of selling.
AI Data Center Concerns Pressure Technology Stocks
Growing uncertainty over US data-center expansion is a major factor behind the decline. Following the US midterm elections, investors are assessing whether potential regulatory restrictions and local opposition could delay data-center projects. Concerns are focused on the power, water, and infrastructure requirements of large AI facilities. UBS strategists estimated that nearly 30% of expected data-center additions in 2028 could face potential disruption, adding another risk to an AI investment cycle already facing scrutiny over rising costs.
Qualcomm Stock Plunges on Weak Chip Outlook
Semiconductor stocks are among the biggest sources of pressure, with Qualcomm's latest outlook adding to concerns about chip demand. Qualcomm shares fell around 10% in premarket trading after its forecast for smartphone chip sales missed Wall Street expectations. The company pointed to sluggish demand and declining revenue from Apple-related business as key challenges. Weakness spread to other chipmakers: Nvidia, Marvell Technology, and Intel traded lower, while AI infrastructure companies CoreWeave and Nebius also faced selling pressure. Qualcomm's outlook has raised questions about the broader semiconductor market, particularly as investors weigh weaker smartphone demand against the significant growth expectations already priced into AI-related stocks.
Big Tech AI Spending Raises Valuation Concerns
Another factor weighing on Nasdaq stocks is growing scrutiny of Big Tech's aggressive artificial intelligence spending. Major technology companies are investing heavily in data centers, advanced processors, cloud infrastructure, and networking systems to support AI development. These investments create opportunities across the technology sector but also increase capital expenditure requirements. Investors are increasingly asking whether expected returns can justify the scale of spending. If AI revenue growth fails to keep pace with infrastructure investment, companies could face pressure on margins, cash flow, and valuations. This concern is particularly relevant for semiconductor manufacturers and data-center operators whose growth prospects depend on continued expansion. The latest decline reflects more than a single earnings or economic concern; it also signals growing investor scrutiny of the financial returns behind the AI boom.
US Jobs Report Could Influence Nasdaq's Next Move
The upcoming October US jobs report is another important factor shaping investor sentiment. Economists expect the US economy to add approximately 65,000 jobs in October, with the unemployment rate forecast at 4.2%. Wage growth will also be closely watched for signs of persistent inflation. The report could influence Treasury yields and expectations for the Federal Reserve's next policy decisions.
- Stronger jobs growth: Could reinforce expectations of higher-for-longer interest rates, putting pressure on technology stocks and their valuations.
- Moderate hiring: Could support a softer economic landing and help stabilize investor sentiment.
- Weaker employment: Could raise concerns about economic growth and increase uncertainty across the broader stock market.
With technology stocks particularly sensitive to interest-rate expectations, Friday's report could become the next major catalyst for the Nasdaq.
Will the Stock Market Sell-Off Continue?
The Nasdaq Composite outlook will largely depend on whether investors regain confidence in the AI investment cycle and the broader economic outlook. For now, three developments deserve attention: semiconductor stock performance, the pace of data-center investment, and movements in US Treasury yields. Continued weakness in chipmakers could keep the technology-heavy index under pressure, particularly if investors continue reducing exposure to high-valuation AI stocks. Friday's employment report is the immediate market catalyst. A moderate reading could help stabilize sentiment, while stronger wage growth or unexpectedly resilient hiring could renew concerns about interest rates.
