Thursday, November 5, was the worst day for U.S. stocks since the pandemic crash of March 2020. The Nasdaq-100 plunged 6.4%, wiping out roughly $2.5 trillion in market value in a single session. The S&P 500 fell 4.3% and the Dow dropped 3.4%, or 1,833 points. Chip stocks bore the brunt of it: the semiconductor index fell 12.3% — its worst day in about six and a half years — and Nvidia lost close to 9%. The VIX, Wall Street's fear gauge, jumped around 70% in one day, its biggest one-day rise in almost two years.
An Election, a Rally, Then a Reversal
The wild week began with politics. On Tuesday, November 3, the U.S. midterm elections delivered a Democratic majority in both chambers of Congress, as well as Texas. On Wednesday, markets celebrated: the Dow surged 1,569 points and oil fell 9% on hopes of an Iran peace deal.
Then, on Thursday, the market read the very same result differently. Investors began to worry the new Congress could slow approvals for AI data centers and impose tougher rules on artificial intelligence — the same AI boom that has driven markets for two years. A weak forecast from chipmaker Qualcomm lit the fuse. The same news pushed markets in opposite directions within 24 hours — depending on how investors interpreted it.
The Jobs Report and the Fed
Friday brought a second surprise. The October jobs report showed employers added 165,000 jobs — nearly three times the roughly 65,000 economists had expected — and unemployment dipped to 4.1%. Strong hiring is good news for workers, but it gave the Federal Reserve room to keep interest rates higher for longer. Markets quickly raised the odds of another rate hike at the December meeting to around 77%, up from about 67% before the report.
Crypto's Tough Week
Crypto did not escape the selloff. Bitcoin fell to $74,762 on Friday, its lowest level since August 21, before steadying near $75,800 over the weekend. U.S. spot Bitcoin ETFs saw roughly $870 million in net outflows in the first four November sessions, and the Fear & Greed index touched 28 — "Extreme Fear." Notably, gold rose 4.6% on the week, climbing even on the worst equity day — a reminder that when markets panic, investors often reach for the oldest safe haven first, and that Bitcoin still tends to fall alongside stocks when fear takes over.
Key Takeaways
- Markets can change their mind in a day: The same election result sent stocks soaring on Wednesday and crashing on Thursday. Prices react to how investors interpret news, not just to the news itself — and interpretations can flip fast.
- When one trade dominates, it dominates the risk: AI and chip stocks have carried the market for two years, so when they fell, everything fell with them. Concentration is not just a stock-picking issue — it is a whole-market issue, and it is exactly why diversification matters.
- Good news can be bad news for markets: A strong jobs report is great for workers, yet it pushed rate-hike odds higher and pressured stocks and crypto. Understanding how one piece of data ripples through rates, stocks, and crypto turns market news into real money knowledge.
Markets steadied to start the new week, with Asian chipmakers rebounding as investors reset for Tuesday's inflation report. For those building their money knowledge from the ground up, our Investing Fundamentals and Budgeting & Saving Basics courses cover how markets, diversification, and interest rates actually work — in plain language, no jargon.