Highlights

  • Major U.S. indices closed at their lowest levels in two weeks.
  • AI-linked stocks led declines, with AMD plunging over 7%.
  • October layoffs surged 183% month-over-month, signaling labor market pressure.

U.S. stocks declined sharply on Thursday, erasing the prior session’s gains as weakness in artificial intelligence (AI)-related shares weighed on sentiment. All three major indices ended lower, marking their weakest close in two weeks.

The Nasdaq Composite tumbled 445.80 points or 1.9% to 23,053.99, while the S&P 500 dropped 75.97 points or 1.1% to 6,720.32. The Dow Jones Industrial Average fell 398.70 points or 0.8% to 46,912.30, closing near session lows.

The session’s downturn followed renewed selling pressure in AI and semiconductor names, reversing momentum from Wednesday’s recovery.

AI and Chip Stocks Lead Declines

Technology and AI-linked stocks saw the steepest losses. Advanced Micro Devices (NASDAQ: AMD) fell 7.3%, giving back strong gains from the previous day. Palantir Technologies (NYSE: PLTR), Oracle (NYSE: ORCL), and Nvidia (NASDAQ: NVDA) also moved notably lower.

Qualcomm (NASDAQ: QCOM) declined 3.6% despite reporting fiscal fourth-quarter earnings that topped expectations and offering upbeat guidance for the current quarter.

Analysts attributed part of the decline to concerns about a potential AI market correction. Sentiment has weakened amid discussions of an AI-driven valuation bubble and broader caution across technology sectors.

Layoff Surge Adds to Market Anxiety

Adding to the caution, a new report from global outplacement firm Challenger, Gray & Christmas revealed a significant rise in job cut announcements. U.S. employers announced 153,074 layoffs in October, an increase of 183% from September and 175% higher than a year earlier.

"Some industries are correcting after the hiring boom of the pandemic, but this comes as AI adoption, softening consumer and corporate spending, and rising costs drive belt-tightening and hiring freezes," said Andy Challenger, Chief Revenue Officer of the firm.

He added that those affected are finding it harder to secure new roles, suggesting a gradual loosening in labor market conditions.

Through the first ten months of 2025, U.S. companies have announced 1,099,500 job cuts, marking the highest year-to-date total since 2020.

Sector and Global Market Moves

Semiconductor stocks were hit hardest, with the Philadelphia Semiconductor Index dropping 2.4%. Software names also struggled, as reflected by a 2.2% decline in the Dow Jones U.S. Software Index.

Retail, airline, and computer hardware shares also saw notable weakness. Energy stocks, however, managed modest gains despite a slight dip in crude oil prices.

In global markets, Asia-Pacific equities largely advanced, led by Japan’s Nikkei 225 up 1.3% and Hong Kong’s Hang Seng Index up 2.1%. In contrast, European markets retreated, with the FTSE 100 down 0.4%, DAX down 1.3%, and CAC 40 lower by 1.4%.