Nov 5 : The Nasdaq slid more than 10 per cent from its record close on Thursday, on track to confirm a correction as worries over massive AI spending and heightened scrutiny of data-center expansion rattled tech stocks.

The tech-heavy Nasdaq Composite Index fell nearly 4 per cent to 24,712.60, more than 10 per cent below its record closing high of 27,599.89 reached on October 6.

Thursday's slide erased the previous session's gains after Democrats swept both houses of Congress, as investors weighed the prospect of greater scrutiny of further AI infrastructure buildout.

"When you go from full unified control under one party to full unified control under another party that can also represent quite a bit of uncertainty, discontinuity and abrupt change to policy," said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute.

"When it looked like the Democrats were going to take significant majorities in both the House and the Senate, we thought that at the very least, it would lead to markets taking a little bit of a pause."

A decline of 10 per cent from the most recent record closing high is widely considered a correction. It would mark the Nasdaq's second correction this year.

Sentiment toward AI-linked stocks has deteriorated in recent weeks, with the Nasdaq shedding more than $2.5 trillion in market value in October. Several big tech companies are tapping debt markets to help finance billions of dollars in planned investments in data centers, chips and other infrastructure required to support AI development.

Investors have increasingly questioned how quickly those investments will translate into profits, particularly as persistent geopolitical tensions in the Middle East and fears of prolonged inflation have kept borrowing costs elevated.

Earnings from hyperscalers Alphabet and Meta last month failed to reassure investors about the returns on AI spending, contributing to a broader selloff in AI-linked stocks.