Wall Street's November 5 sell-off: Goldman Sachs explains the reversal

Wall Street experienced a massive sell-off on Thursday, November 5, 2026, with semiconductor and AI infrastructure stocks hit hard, reversing the previous day's post-election rally. Goldman Sachs attributed the sudden decline to a reversal of pre-election investment moves. Long-only managers, who had reduced risk before the elections, were caught off guard by Wednesday's surge and re-entered the market. However, hedge funds quickly reversed course on Thursday, selling off positions, particularly in hyperscalers, with the sell-off intensity being roughly five times greater than options markets had anticipated. Goldman Sachs noted the decline was driven by macro product sales rather than company-specific issues, and investors are now shifting focus from AI's long-term demand to the cost and pace of investments. While some buyers showed interest in Nvidia, TSMC, Microsoft, and CoreWeave, the bank warned that selling pressure may persist.