How much did the Nasdaq decline?

The Nasdaq Composite fell 4.2%, its worst daily drop in over a year.

What caused the selloff?

The selloff was driven by disappointment over Broadcom's earnings report and rising bond yields, leading to a broad tech selloff.

When was the last similar decline for the Nasdaq?

The last similar decline was on April 10, 2025.

Were other stocks affected besides Broadcom?

Yes, other AI stocks like Nvidia (NVDA) and AMD (AMD) also fell.

Nasdaq Sinks 4.2% in Worst Day in a Year as AI Selloff Intensifies

The Nasdaq Composite suffered its worst daily decline in over a year, dropping 4.2%, as a selloff in AI stocks accelerated following Broadcom's underwhelming earnings report and higher bond yields.

The Nasdaq Composite had its worst day in more than a year, sinking 4.2% on Thursday, according to Dow Jones Market Data. It was the index's largest daily decline since April 10, 2025.

Selling began before the market open as Wall Street continued to shed high-flying AI stocks after Broadcom's (AVGO) earnings report earlier in the week failed to excite investors following a parabolic run over the past year.

Reasons for the Move

Broadcom Earnings Disappointment

Broadcom reported fiscal second-quarter results that did not meet the lofty expectations built into its stock price after a massive rally. This disappointment spilled over to the entire AI sector.

Rising Bond Yields

The selloff coincided with a rise in the 10-year U.S. Treasury yield, adding pressure on technology stocks that rely on future cash flows.

Spending Concerns

Reports of a potential slowdown in corporate spending on AI infrastructure added to worries, prompting investors to take profits.

Broader Context

The decline comes after a period of strong gains for tech stocks, especially those tied to AI. The Nasdaq had recently hit record highs, making it vulnerable to a correction.

Similar Moves in the Sector

Losses were not limited to Broadcom; other AI-related stocks such as Nvidia (NVDA) and AMD (AMD) also fell by varying degrees.

What This Means for Investors

The sharp drop serves as a reminder of the volatility in tech stocks, particularly at elevated valuations. Investors should monitor inflation data and upcoming earnings reports to gauge whether this correction is temporary or the start of a broader downtrend.