Chip Stocks Led a Selloff That Erased the Election Rally

Thursday’s stock selloff wiped out the prior session’s broad-market advance. SPY fell 4.41% and DIA fell 3.52%; QQQ, which tracks the Nasdaq-100 rather than the Nasdaq Composite, declined 6.49%. From Tuesday’s close through Thursday’s, SPY was down 2.83%. AP identified companies tied to the data-center buildout as leaders of the retreat. The semiconductor fund SMH’s 11.21% decline shows how far that group diverged from the broad tape.

Arm fell 13.08% in its first regular session after Wednesday’s results. Its fiscal second-quarter revenue grew 27% to $1.44 billion, but the components grew at very different rates: license and other revenue rose 50%, against 8% for royalties. Arm said license timing and deal size affected the comparison. Management pointed to first commercial deliveries of its AGI CPU in fiscal Q4 2027; that remains a company milestone, not reported shipment revenue. AMD and Micron also fell by double digits. The timing of Arm’s release does not explain those other moves.

The Treasury’s November 5 par curve showed the two-year yield at 4.46%, down from 4.58%, and the 10-year at 4.84%, down from 4.90%. The longer yield did not rise in tandem with the equity selloff. That makes higher Treasury yields an incomplete explanation for the fall in growth stocks. The closing record establishes the scale of the semiconductor losses; it does not establish a new order or margin shortfall at every supplier.