Major technology stocks suffered a massive sell-off following the US midterm elections, as Democratic victories fueled concerns over a potential slowdown in artificial intelligence development. The Nasdaq composite index dropped more than 5.5%, losing approximately $2.5 trillion in market capitalization, while the S&P 500 and Dow Jones Industrial Average also recorded significant declines. Investors are reacting to widespread campaign pledges to restrict data center construction, including a moratorium proposed by Texas governor-elect Gina Hinojosa.
Semiconductor manufacturers were hit particularly hard, with the Philadelphia Semiconductor Index falling over 12%. Nvidia shares slid more than 9%, while AMD and Micron both dropped by over 17%. Additionally, shares in Elon Musk’s companies, Tesla and SpaceX, fell 11% and 8% respectively, contributing to a combined loss of over $1 trillion in value for the seven largest tech firms in a single trading day.
Market analysts suggest the downturn reflects growing skepticism regarding the profitability of massive AI infrastructure investments. Wealth Club strategist Susannah Streeter noted that the market is reeling from the collision of these financial concerns with the prospect of regulatory hurdles for data centers. Industry leaders, including OpenAI’s Greg Brockman and Meta’s Dina Powell McCormick, acknowledged the need for better community engagement to address the public backlash against AI infrastructure.
