Wall Street loses $5.7 trillion as AI investment bets unwind

Wall Street faced a $5.7 trillion market value loss this week as concerns over the artificial-intelligence investment boom and a Democratic congressional sweep triggered a global sell-off, raising doubts about AI infrastructure spending and corporate valuations. The turmoil included a $2.3 trillion wipeout in the Nasdaq 100 on Thursday, with 57% of its constituents falling at least 20% from highs, while hedge funds and leveraged investors amplified forced selling. A Friday rebound in chipmakers followed strong jobs data, but the Federal Reserve is expected to hike interest rates again in December. Investors are rotating toward defensive sectors like utilities, though Thursday’s rout showed limits to that escape. Oil price declines on hopes of an Iran war wind-down offer potential inflation relief, while some fund managers who exited AI holdings early have outperformed the S&P 500 this year.