Midterm results rattle AI-linked stocks as data-center curbs loom

The Nasdaq 100 fell 6.3%, wiping out $2.3 trillion in market value, and the S&P 500 fell 4.4%, erasing $2.8 trillion from the index’s value, NBC News reported.[1] Both indexes had their worst day since April 2025, when President Donald Trump’s global tariffs rocked markets.[1] The Nasdaq Composite fell more than 5.5% during the session, according to NBC News.[1] Reuters reported that the Nasdaq had fallen more than 10% from its record close and was on track to confirm a correction, which would be its second this year.[2]

Markets had expected Democrats to win congressional majorities, but not victories on the scale they achieved, NBC News reported.[1] Hundreds of elected candidates had pledged to rein in AI data centers, raising the prospect of more regulation.[1] NBC News said Democrats who won races for governor, attorney general, and state and federal legislative seats had pledged to slow or halt data-center construction.[1] The report described Texas as the country’s largest data-center market and referred to Gina Hinojosa as governor-elect.[1] For companies planning new facilities, those pledges put local and state policy risk in focus.

The Philadelphia semiconductor index dropped 12.3%, its worst day since March 2020, NBC News reported.[1] Nvidia fell 9.2%, its largest one-day decline since April 2025, and was the biggest contributor to the Dow’s loss.[1] SpaceX and Tesla each fell nearly 10%, largely in response to the midterm results, and had shed more than $400 billion in value since the election results, NBC News reported.[1] The losses landed in a sector that had drawn billions of dollars of investment into companies making chips and infrastructure needed to develop and operate AI.[1]

The selloff extended into Asian markets: South Korea’s Kospi fell more than 8%, triggering a temporary marketwide trading halt, while Japan’s Nikkei 225 fell as much as 6% and Taiwan’s TAIEX dropped 9%.[1] The Guardian reported that the VIX rose 61% to its highest level since the early weeks of the Iran war.[3] Separately from the election-related concerns, investors have questioned how quickly AI infrastructure investments will produce profits amid elevated borrowing costs.[2] Ed Yardeni said he did not think the AI bubble was bursting, while President Donald Trump blamed Democrats for Thursday’s market drop.[1]