Wall Street plunges as AI fears rattle investors

A savage sell-off has rocked US sharemarkets, raising questions for Australians with retirement savings invested in overseas shares.

Wall Street has suffered its worst session since the April 2025 tariff shock, with the S&P 500 tumbling 4.4 per cent and the technology-heavy Nasdaq plunging 5.5 per cent.

The Dow Jones Industrial Average shed 1,833 points, or 3.4 per cent, as Thursday’s trading erased the previous day’s strong gains. Despite the rout, all three indexes remained higher for the year.

Reuters reported approximately US$3 trillion was wiped from the value of S&P 500 companies as investors reassessed the outlook for artificial intelligence following the Democrats’ midterm election victory.

The concern centres on whether tougher regulation will slow construction of the enormous data centres underpinning the AI boom. Nvidia shares fell more than 9 per cent, while the Nasdaq finished more than 10 per cent below its October record, confirming a market correction.

AI boom hits a roadblock

The selling spread well beyond a handful of technology giants.

All 11 sectors of the S&P 500 finished lower, according to Reuters. Semiconductor stocks suffered their second-biggest daily fall on record, with AMD and Micron among those losing approximately 17 per cent.

The Australian dollar also fell about 1 per cent against the greenback during the session, while gold rose as investors sought shelter from the turmoil.

What does it mean for your super?

For Australians approaching retirement or drawing an income from super, the connection is their fund’s investments.

Super options can hold Australian and international shares alongside assets such as bonds, property and cash. That means exposure to falling US shares varies considerably between funds and investment choices.

ASIC’s Moneysmart explains that diversified options spread money across different asset classes. A Wall Street index falling 5 per cent therefore does not mean every Australian’s super balance falls by the same amount.

The overnight figures alone cannot establish the loss, if any, to an individual retirement account.

For readers checking their balances, the relevant figures are their own investment option’s published returns and asset mix. Those provide a clearer picture of exposure than the headline decline in a single overseas sharemarket index.