Dow drops 1,200 points, Nasdaq enters correction after election rally fades

The Dow Jones Industrial Average plunged about 1,200 points on Thursday, erasing most of the prior day's rally fueled by midterm election results, with the Nasdaq falling into correction territory. The S&P 500 dropped 3.2%, while the tech-heavy Nasdaq fell 4.8%, more than 10% below its recent peak. The selloff hit AI firms as investors weighed risks from newly empowered Democrats, with Nvidia down 7%, AMD down 12%, and SanDisk down over 15%. The downturn reversed Wednesday's 1,570-point Dow surge, its best day since April 2025. Analyst Dan Ives warned of a "seismic shift" slowing AI buildout, as Democratic victories in states like Ohio and Texas, plus a likely House majority, prompted OpenAI to unveil new data center policies Thursday.