The Nasdaq 100 erased a record $2.3 trillion in market value on Tuesday, marking the steepest notional loss ever recorded for the index, according to Protos. The plunge followed an accelerating sell‑off in artificial‑intelligence (AI) stocks that began on Oct. 7 and was accompanied by a more than 70% surge in the CBOE Volatility Index (VIX) within a single trading session.

AI stocks drive the crash

Shares of companies tied to AI hardware and software fell sharply, pulling down the broader Nasdaq 100. The sell‑off was broad‑based, affecting both pure‑play AI firms and larger technology conglomerates with significant AI exposure. The rapid price declines triggered market‑wide circuit breakers in South Korea, where AI chip makers Samsung and SK Hynix are listed, and contributed to a 6% drop in the KOSPI and a similar slide in Japan’s Nikkei.

Market‑wide fallout

U.S.-listed equities collectively lost over $3.2 trillion in market capitalization, according to the same source. The Dow Jones Industrial Average remained flat, while the Nasdaq 100 rebounded modestly by about 1.5% after the close, helped by a better‑than‑expected headline on 165,000 U.S. job openings. Asian markets opened lower, with South Korea’s KOSPI ending at a nine‑month low and Japan’s Nikkei slipping below the 60,000 mark for the first time since May.

Political backdrop and commentary

Commentators cited the recent Democratic sweep in the U.S. midterm elections as a catalyst for heightened uncertainty. Investors feared potential regulatory scrutiny of AI technologies and tighter approval processes for data centers, both of which could affect the profitability of AI‑focused firms. Former President Donald Trump, who had previously praised market gains, shifted tone after the crash, attributing the decline to Democratic voters and urging personal accountability.

What to watch next

Analysts will monitor whether the AI sell‑off stabilizes or deepens as policymakers outline concrete AI oversight measures. Attention will also focus on the VIX, which may remain elevated if volatility persists. Finally, upcoming earnings reports from major AI hardware manufacturers could provide further clues on the sector’s resilience and the broader market’s direction.