US Midterms Spark $2.5T Tech Sell-off Amid AI Investment Jitters

Global technology markets experienced a significant downturn, with an estimated $2.5 trillion in market value wiped from the stock market, largely impacting the tech-heavy Nasdaq Composite. This substantial sell-off occurred on Thursday, November 5, 2026, following the United States midterm election results. The Nasdaq Composite alone saw a decline of 5.5% to 5.52%, while the S&P 500 dropped by 3.5% to 4.4%, and the Dow Jones Industrial Average fell by 2.7% to 3.4%. This widespread market plunge reversed an earlier rally seen on Wednesday, which had followed the initial midterm election outcomes.

Investor anxiety was primarily fueled by concerns that the Democratic Party's strong performance in the midterms could lead to increased regulatory scrutiny and potential restrictions on artificial intelligence (AI) infrastructure development. Specifically, fears emerged that newly empowered Democratic majorities in Congress and state governments might implement policies to slow the construction of AI data centers, which are crucial for the industry's expansion. This apprehension was notably heightened by a Democratic gubernatorial victory in Texas, a key state for data center investments.

The impact was particularly severe for companies heavily invested in AI. Leading chipmakers like Nvidia and Advanced Micro Devices (AMD) experienced sharp declines, with Nvidia falling between 7.5% and 9.3%, and AMD tumbling between 14.6% and 17.3%. Other AI-related firms and those involved in data center buildouts, such as CoreWeave, also saw significant drops, ranging from 10% to 12.1%. Globally, markets reacted in kind, with South Korea's Kospi index plunging by 5.3% to almost 9%.