AI Data-Center Fears Trigger a Historic Nasdaq Selloff

The NQ opened its Globex session at 28,663.00, reached a full-session high of 28,668.50, and fell to 26,570.00, a 2,098.50-point range. Its official settlement was 26,752.00, down 1,814.75 points, or 6.35%, from Wednesday’s official settlement. In the cash market, Reuters reported that the Nasdaq 100 lost about $2.5 trillion in market value.

Sometimes the stock market's direction is decided long before the 9:30 a.m. regular-session open. One concern was the claim by Iran's Revolutionary Guards that four oil tankers had been destroyed or hit mines while trying to pass through the Strait of Hormuz. That remained an unconfirmed claim. Asian chipmakers were also weak: South Korea's KOSPI fell 5.28%, and Japan's Nikkei fell 1.8%. But the bigger story for U.S. technology stocks was concern that Democrats would push for tighter restrictions on AI data-center construction.

I know I said to sell the early rallies and look to buy the pullbacks, but as more headlines hit about AI data-center restrictions, the markets crashed. And when I say crashed, I mean it. After the cash open, the NQ sold off sharply, while the PHLX Semiconductor Index had its worst day since March 16, 2020, during the COVID-19 panic. I have seen a lot of crashes, but this market kept falling and falling and falling.

The ES opened its Globex session at 7,737.25, reached 7,738.75, and eventually fell to 7,346.00, a 392.75-point full-session range. The 9:30 a.m. cash-session open was 7,707.50.

For perspective, the cash S&P 500 ranged from 4,835.04 to 5,246.57 on April 7, 2025, a 411.53-point swing. On April 9, it ranged from 4,948.43 to 5,481.34, a 532.91-point swing, and gained 474.13 points from the previous close. Those are cash-index figures, not ES futures prices. Thursday's official cleared futures volume was 1,004,813 NQ contracts and 2,412,784 ES contracts.

SOX Rug Pull

The last move we saw like this started on April 2, 2025, when Trump announced sweeping global tariffs, including a 10% baseline import tax, triggering a massive wave of selling. The S&P 500 plunged nearly 5% on Thursday and another 6% on Friday, wiping out roughly $6.6 trillion in market value over two sessions and sending the Nasdaq into bear market territory. By Monday, April 7, panic was in full swing, with the VIX surging above 60 as algorithmic trading, forced liquidations, and aggressive dip-buying fueled violent swings in the ES. The chaos continued until April 9, when Trump announced a 90-day tariff pause, igniting a historic short squeeze that sent the Nasdaq soaring more than 12%. April 7 was the eye of the storm.

AI Flash Crash

Almost every aspect of the AI trade was under attack. Texas power producers, Silicon Valley software makers, contractors, data-center developers, and New Jersey compute providers were hit by waves of selling. As prices fell, the selling accelerated. Overleveraged traders got taken to the mat. By the end of the day, an estimated $2.5 trillion in Nasdaq 100 market value had been erased. It was a total rug pull.

S&P 500: The Damage Beneath the Surface

While the S&P 500 was trading near record highs, there was already significant damage taking place beneath the surface. According to research from October 6, 2026, 88 S&P 500 stocks were trading 50% or more below their all-time highs, showing just how disconnected the major indexes had become from the performance of many individual stocks.

The picture became even more concerning heading into November. According to 24/7 Wall St., as of November 3, 289 of 502 S&P 500 stocks, or 57.6%, were trading at least 20% below their all-time highs. Then, on November 5, research from MarketCrash showed that 60 of 495 stocks, or 12.1%, were trading at least 50% below their five-year highs.

While these studies use different time frames and measurements, they point to the same underlying problem: The market was already showing serious signs of weakness long before the November 5 selloff. The major indexes were being supported by a relatively small group of large-cap stocks, while much of the broader market had already suffered significant declines. The warning signs were there. The question wasn't whether there was damage beneath the surface, but how long the major indexes could continue to ignore it.

In the end, this is a big fat mess, with everyone pouring into the same names and ending up deeply underwater. Did I call this decline? No. Did I say to sell the early rallies and buy the pullbacks, with one caveat—my trading rule that says the ES tends to go sideways to down after a big up day? Yes. Did I know the market was going to crash? No, but if you asked me if I am surprised, that would also have to be a no.

November’s Fifth Trading Day: A Modest Upside Tendency

By Rich Miller / HandelStats

The S&P 500 has closed higher on November’s fifth trading day in 25 of 46 observations (54.35%), with 21 declines. That represents a modest historical tendency toward gains.

When the fifth trading day fell on a Friday, the index advanced in 11 of 19 occurrences (57.89%). The direction of Thursday’s close further separated the results: following an up Thursday, Friday finished higher in 7 of 11 cases (63.64%). Following a down Thursday, results were evenly split, with 4 advances and 4 declines (50.00%).

The strongest up-day frequency appeared on Fridays following a higher Thursday close, although that finding rests on just 11 observations. Following a down Thursday, the historical record showed no directional preference.

Source: HandelStats historical research. Percentages measure the frequency of higher closes, not the size of returns.

November’s fifth trading day: Historical up-day rate

S&P 500 frequency of a higher close, with observations shown in parentheses.

About Rich Miller

Rich Miller is a former Chicago Mercantile Exchange (CME) floor trader with over 40 years of experience in the futures markets. He is the founder of HandelStats, a quantitative research service providing statistically derived levels based on options pricing, volatility, and time-based market structure.

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Thursday’s ES session started with a two-way overnight trade, then turned into a hard selloff after the cash open. ESZ6 opened Globex at 7737.25 on Wednesday evening and slipped to 7691.00 in Thursday’s 12:45 a.m. five-minute bar. Buyers worked it back to 7738.75 in the 7:00 a.m. bar, but that recovery could not hold. By the end of the overnight session, the ES was back at 7707.50, down 29.75 points from its Globex open and 13.00 below Wednesday’s 7720.50 official settlement. Overnight bar volume totaled 321,950 contracts.

The cash open did not give the bulls much room. The ES opened at 7707.50, made its regular-session high of 7712.50 in the opening five-minute bar, and sold to 7580.50 in the 9:55 a.m. bar. Another leg down reached 7421.00 in the 10:50 a.m. bar. A bounce to 7515.25 in the 11:35 a.m. bar gave the buyers a chance, but the sellers took it back down. The ES reached 7391.25 in the 1:00 p.m. bar, and even the afternoon rebound to 7457.75 in the 2:50 p.m. bar failed to stick.

At 3:50 p.m., the reported last-trade snapshot was 7396.00. The dated MIM reading at 3:51:02 showed $4.546 billion net to sell, expanding to $5.705 billion at 3:53. Price still managed a bounce to 7414.00 within the 3:50 five-minute bar before rolling over again. The final cash-session bar made a 7377.25 low and closed at 7381.25, down 326.25 points, or 4.23%, from the cash open. The separate 4:00 p.m. last-trade snapshot was 7375.00; it is not the regular-session bar close shown in the table.

Selling carried into cleanup. The ES made the full-session low of 7346.00 in the 4:55 p.m. bar and finished at 7353.00 at 5:00 p.m., down 367.50 points, or 4.76%, from Wednesday’s settlement. Thursday’s official settlement was 7383.00, down 337.50 points, or 4.37%.

In terms of the ES’s overall tone, the overnight recovery gave way to repeated failed rallies and a finish near the lows. In terms of overall trade, official cleared volume was 2,412,784 contracts; the table’s separately measured five-minute bar volume totaled 3,341,762. NQZ6 also took a beating, losing 1460.75 points, or 5.18%, from its cash open to its 26742.50 regular-session close. Its official settlement was 26752.00, and its 5:00 p.m. last price was 26604.00. On a day like this, a bounce was only a bounce until buyers could hold it. They never did.

Selling pressure narrowed into the final snapshot

At 15:51:02 Eastern yesterday, the MIM showed a $4.5 billion all-market sell imbalance: $3.0 billion to buy against $7.6 billion to sell. Selling dominated dollars at 71.4%, even though 361 buy symbols outnumbered 321 sell symbols. That split matters: the heavier sell orders outweighed slightly broader buying participation.

Nasdaq carried $4.0 billion net to sell, with an 84.2% dollar sell lean and 67.0% symbol sell lean. The S&P 500 showed $4.3 billion to sell; NYSE stood at $610.3 million to sell. Those overlapping market groups should not be added together.

The minute snapshots grew more negative through 15:53, reaching $5.7 billion net to sell as gross selling hit $8.3 billion. From 15:53 to 15:55, buying increased from $2.6 billion to $3.7 billion while selling eased to $6.9 billion. The net sell balance narrowed to $336.0 million at 15:58, widened again to $1.1 billion at 15:59, then finished the displayed 16:00 snapshot at $679.0 million to buy. Both gross sides contracted in that final minute; the positive net alone does not establish fresh buying or a price reversal.

The accompanying stock tables put MSFT at $214.7 million to buy and MU at $159.5 million. AVGO led selling at $351.1 million, followed by NVDA at $324.9 million. Information Technology showed $3.2 billion net to sell, while Industrials showed $106.0 million to buy. These tables accompany the historical view; they are not a verified decomposition of the final snapshot. No comparable historical cohort was checked, so this session receives no rarity ranking.

Want to follow the auction pressure behind this recap? Explore the MIM’s live imbalance snapshots and sector view.

How the NYSE and Nasdaq auctions work

How to read the MIM

Don’t trade the open alone. Join us live in The Pit for free, follow the conversation, and bring your questions.

Friday, November 6: Rich Miller of HandelStats joins The Pit for live futures trading from 9:00 to 11:00 a.m. ET. Watch on YouTube.

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Polaris Trading Group

Polaris Trading Group’s November 5 session turned into a lesson in staying with the dominant direction while keeping risk under control. David began with a conditional downside framework, then adjusted as the selling pushed well beyond the initial objectives. The room followed the retracement of the prior rally, watched successive downside reference areas and looked for stabilization without treating every pause as a reversal. Late in the day, a brief bullish breakout reached its first nearby reference, but the closing discussion returned to weakness.

The opening framework

• David’s bear case required acceptance below 7712, with a five-point allowance. The initial downside objectives were 7705, 7695 and 7685. Those were conditional planning levels, rather than a record of entries or completed trades.

• As the decline developed, David emphasized that the previous day’s sharp rise left room for a substantial retracement. He later described the move as retracing the entire 275-point rally. The practical focus shifted from defending the opening map to following the direction actually unfolding.

• During the morning, David marked approximately 7625 as a 50% retracement reference from the 7490 low and identified 7580–7585 as another retracement zone. These were evolving intraday references, not a fresh plan for today.

Downside references and stabilization

• The ES 7455 D-Level became a repeated reference as the room tracked the selloff. David connected the Cycle Day 2 violation levels with the D-Level Money Box zone, then noted that the first Money Box was playing out.

• He looked for stabilization and a possible reversal play, but his later assessment separated the two: price was stabilizing without delivering a reversal. He still saw potential for further downside. That distinction kept a temporary pause from becoming an automatic bullish signal.

• A later Money Box observation described a precise reaction, but the posts did not supply a complete entry, exit and position-size record. The review therefore treats that comment as a reported technical reaction, without attaching a trading return to it.

Risk came first

• David repeatedly reminded the room to control risk, use stops and stay aligned with the dominant directional forces. He also made the simplest decision explicit: traders did not have to participate in that market.

• Other participants raised platform problems and the difficulty of trading the rapid moves. Those comments provided context for the repeated risk reminders; they did not establish a shared position or a common execution result.

• The room also discussed downside-limit reference prices. Those were preparation and risk references. Their appearance in the discussion is not evidence that an exchange limit or market-wide trading halt actually occurred.

The late bounce and closing tone

• Later, David said a reclaim of 7440 could allow a squeeze. A subsequent post confirmed that the bullish move from the 7440 breakout reached 7455. That follow-up supports the specific move he described, without establishing that every trader took it.

• The next task was holding the pullback. David marked 7455 as key resistance for future reference and said reclaiming the prior 7490 low would be meaningful. Those conditions remained separate from the already reported bounce.

• The final posts described closing weakness and a close near the lows. The takeaway from the room was disciplined adaptation: follow the prevailing move, require evidence before calling a reversal and keep the option of standing aside.

DTG Room Preview

The DTG group is approaching today’s session with a conditional map after yesterday’s sharp selloff. The focus is whether an overnight stabilization becomes a relief bounce or gives way to another leg lower. The group reports mixed large-trader activity, without a clear directional bias.

Market backdrop and catalysts

• DTG is watching technology leadership and the market’s response to AI-related concerns. A bounce needs to hold before it can establish a durable change in tone.

• The group identifies today’s jobs report as a major catalyst and expects elevated volatility. Its scenarios include continued downside, a substantial rebound or sideways adjustment.

Levels and tactical watch

• The DTG group is watching a reclaim of 7450 as a condition that could help establish the revised lower channel boundary as support. Until then, broken channel boundaries remain potential resistance in its framework.

• Potential trend-line resistance zones are 7399–7404, 7435–7440, 7730–7735 and 7886–7891. The group marks 7298–7303 as potential trend-line support. These are conditional room reference areas.

• DTG is treating the 7450 moving-average area as a possible resistance test and is watching whether a relief rally can retain its gains.