Wall Street bloodbath: $2.5 trillion wiped out as Nasdaq suffers worst crash in 18 months

US stocks crash

Wall Street suffered a massive selloff on Thursday (local time), wiping out a whopping $2.5 trillion in market value in a single day amid AI fears. The fall came a investors pulled back from technology stocks amid growing concerns over heavy artificial intelligence spending and the possibility of tighter industry regulation.The Nasdaq plunged more than 5% while the Dow Jones Industrial Average shed 1,833 points and the S&P 500 recorded its worst single-day fall since April 2025. The selloff also spread to Asian markets on Friday, with Japan's Nikkei sliding 6% and South Korea's Kospi tumbling more than 8% in early trade.The sharp decline came as investors reassessed some of the year's most popular AI-related trades. Growing signs that the artificial intelligence industry could face tougher scrutiny following the US midterm election results have raised concerns about the pace of investment in the sector.

Investors are also positioning for a slower expansion of data centres, putting pressure on chipmakers and companies supplying equipment and infrastructure to the industry.The Nasdaq Composite slumped 5.5%, marking its worst session in 18 months. The decline pushed the index more than 10% below its recent record high, placing it in correction territory. The loss of $2.5 trillion in market value was its biggest single-day erosion on record.

Nvidia, previously the world's largest company by market capitalisation, dropped 9.3%, leaving its shares in negative territory for the year. Memory maker SanDisk plunged 22%, while hard drive manufacturer Western Digital lost 17%.The weakness extended across the wider US market, with the Dow Jones Industrial Average, comprising 30 major US companies, falling 1,833 points, or 3.4%, to close at 51,868. The S&P 500 declined between 4.3% and 4.4%, marking its steepest single-day fall since early April 2025, when concerns over US President Donald Trump's Liberation Day tariffs had rattled markets.All 11 industry sectors of the S&P 500 ended lower, with seven recording losses of at least 2%. Caterpillar shares dropped 6.4%, JPMorgan Chase fell 4.2%, while UnitedHealth and 3M both declined more than 3%, adding to the pressure on the Dow.The sharp fall in equities also prompted investors to move towards safer assets, driving demand for US government bonds. The yield on the benchmark 10-year Treasury note slipped to its lowest level since September 9.Meanwhile, Wall Street's VIX, widely known as its 'fear index', surged 61% to its highest level since the early weeks of the Iran war, signalling heightened market volatility.