Wall Street crash: Dow plunges 1,800 points as AI stock sell-off wipes out midterm rally

US stock markets suffered their heaviest fall in more than a year and a half on Thursday as investors rushed to sell shares in artificial intelligence (AI) companies.

The Dow Jones Industrial Average dropped 1,833 points, or 3.4 per cent, to close at 51,523. The S&P 500 fell 4.4 per cent, its worst day since April 2025, when President Trump's sweeping tariffs rattled markets. The tech-heavy Nasdaq lost 5.5 per cent and is now almost 12 per cent below its record high set last month.

Chipmakers were hit hardest. Nvidia, the world's most valuable AI chip company, fell 9.3 per cent, and Advanced Micro Devices tumbled 17.3 per cent. The sell-off wiped out a strong rally the day before, when markets rose after the US midterm elections.

Investors are worried that the boom in building AI data centres could slow, partly because borrowing has become more expensive. Some analysts say AI shares have risen too far, too fast. Results from the midterms also raised concerns that some governments could pause new data centre projects as voters complain about rising electricity bills.

The turmoil spread to Asia, where South Korea's main index fell more than 5 per cent. Brent crude oil rose almost 4 per cent to about $98 a barrel, as uncertainty over the conflict with Iran continues to push up energy prices.