US Stock Market Trend (Nov 6): Nasdaq Drops 5.52% Into Correction, Magnificent Seven Evaporates Over $1 Trillion

Written by: Chaohang Research

The Nasdaq Composite plunged 5.52%, entering a technical pullback; the S&P 500 and Dow Jones fell 4.36% and 3.44% respectively, wiping out all gains from Wednesday's post-election rally.

The "Magnificent Seven" collectively saw over $1 trillion in market capitalization evaporate, led by Nvidia; the PHLX Semiconductor Index dropped approximately 12%.

After hours, Airbnb and Cloudflare surged on guidance beating expectations, while DraftKings and Atlassian plummeted.

Nasdaq Enters Pullback as Major Indices Record 19-Month Single-Day Losses

On Thursday, the Nasdaq Composite fell 5.52% to close at 24,315.00, dipping into a technical pullback range with a drawdown of over 10% from its recent highs.

The S&P 500 fell 4.36% to close at 7,353.73; the Dow Jones dropped 1,833.06 points, a 3.44% decline, to close at 51,523.06. The Nasdaq 100 fell 6.36% to 26,629.81, and the Russell 2000 dropped 4.45% to 2,729.89.

All three indices recorded their largest single-day percentage declines since the tariff shock on April 4, 2025. The VIX rose 11.57 points to 28.18, marking its highest level since March 31 and its largest single-day gain since April 4, 2025.

All 11 GICS sectors of the S&P 500 closed down, with Information Technology falling 7.30%, the worst performance since March 16, 2020; the Technology Select Sector SPDR Fund (XLK) dropped 8.04%. On the NYSE, deciners outnumbered advancers by nearly 6:1.

AI Infrastructure Stocks Lead Declines as Mag 7 Lose Over $1 Trillion

Markets continue to digest data center regulatory risks following Democrats' sweep of Congress, putting pressure on AI-related stocks.

The "Magnificent Seven" collectively saw over $1 trillion in market capitalization evaporate. Nvidia fell over 9%, wiping out more than $440 billion in market cap, expanding its year-to-date loss to approximately 2.6% and turning negative; AMD and Micron both dropped around 17%; CoreWeave fell approximately 10%; GE Vernova declined 7.5%.

The PHLX Semiconductor Index dropped approximately 12%, marking the second-largest single-day decline on record. SanDisk fell approximately 22% intraday.

Apple and Microsoft, which hit record highs on Wednesday, also pulled back with the broader market. Trades betting that divided government would benefit equities were overshadowed by AI regulation concerns within a single day.

Airbnb and Cloudflare Surge After Hours, DraftKings Falls Over 20%

Airbnb reported third-quarter revenue of $4.87 billion, up approximately 19% year-over-year, beating expectations of $4.75 billion; earnings per share were $3.16, above the forecast of $2.85.

The company raised its full-year revenue growth outlook to "high teens" and added a $12 billion stock buyback authorization. Shares jumped roughly 11% after hours to $188.89.

Cloudflare posted third-quarter revenue of $782.5 million, surpassing expectations; fourth-quarter revenue guidance of $845 million to $846 million beat estimates of approximately $798 million, driving shares up roughly 14% after hours to $279.

JFrog upgraded its full-year guidance, rising approximately 25% in after-hours trading.

DraftKings reported a Q3 loss of $0.94 per share and revenue of $1.33 billion, both missing estimates, causing shares to fall about 22% after hours. Atlassian dropped over 15% after hours due to a slowdown in its data center revenue growth outlook. Affirm's next quarter guidance slightly beat estimates, but shares fell roughly 11% after hours; Axon reported results below expectations, declining about 13% in after-hours trading.

Initial Jobless Claims Drop to 189,000, Oil Prices Rebound

Weekly initial jobless claims stood at 189,000, lower than the expected 197,000, a decrease of 6,000 from the prior week.

U.S. Treasury yields fell. The 10-year yield dropped more than 5 basis points to 4.839%, and the 2-year yield fell over 11 basis points to 4.466%.

WTI crude oil rose 2.7%, settling at $90.52 per barrel; Brent crude gained 3.8%, closing at $98.29 per barrel. Attacks on tankers renewed supply concerns, with both benchmarks previously dropping over 8% on Wednesday.

Bitcoin fell approximately 6%, retreating to around $75,000.

In Focus Today

All times are in Beijing Time.

21:30: U.S. October Non-Farm Payrolls Report. The Dow Jones survey expects an increase of 59,000 jobs, with the unemployment rate holding steady at 4.2%. September saw only 29,000 new jobs added.

Federal Reserve: CME FedWatch indicates the market prices in roughly a 70% probability of a 25 basis point rate hike on December 9. Following Thursday's sharp equity sell-off, some interest rate traders have pushed expectations for the next hike to March next year.