Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street. The postelection rally is a distant memory . The S & P 500 and Nasdaq on Thursday are having their worst days since April 2025, which was when President Donald Trump first announced sweeping tariffs. On Wednesday, as the indexes were soaring, Jim Cramer had been warning that Wall Street's first reaction to the midterm Democratic wave might be wrong. How right he was to be cautious: The Nasdaq is down about 4.5%, which sent the tech-heavy index into a correction. A correction is defined by a decline of 10% from its record high — and for the Nasdaq, that record high was only a month ago. The S & P 500 is down about 4% Thursday, but not near correction levels. The market is plunging Thursday as investors stampede out of tech stocks. Tuesday's Democratic sweep on Capitol Hill and victories key gubernatorial races are sparking fears of an AI…
How Wall Street's postelection rally got obliterated — and what's next
In short
The broad-based equity decline pushed the tech-heavy Nasdaq into correction territory as every sector within the S&P 500 closed in the red. Smaller cloud infrastructure providers are bearing the brunt of the downturn due to tightening project oversight from industry leaders like Microsoft and Meta Platforms. Meanwhile, strong bond purchases pulled the 10-year Treasury yield under 4.9% and tempered expectations for an impending interest rate hike. All eyes are shifting to the October nonfarm payrolls report to gauge the labor market's trajectory and the Federal Reserve's next policy moves.
Key points
- Democratic electoral victories ignited severe concerns regarding an impending slowdown in…: Democratic electoral victories ignited severe concerns regarding an impending slowdown in artificial intelligence data center expansion.
- Established hyperscalers are better insulated than smaller cloud startups because reduced…: Established hyperscalers are better insulated than smaller cloud startups because reduced infrastructure spending may enhance their free cash flow.
- Economists anticipate Friday's employment report will show 65,000 added jobs alongside an…: Economists anticipate Friday's employment report will show 65,000 added jobs alongside an unchanged 4.2% unemployment rate.