AI Stocks Lead Sharp US Market Sell-Off After Democratic Midterm Sweep
Written by AI from aljazeera.com's report. Not checked by a person.
US tech and AI stocks fell sharply on Thursday after Democrats swept the midterm elections, raising fears of new restrictions on AI data centre construction. The Nasdaq dropped 4.8%, with Nvidia, Micron, CoreWeave, and Dell among the hardest-hit companies.
US financial markets retreated sharply on Thursday as investors reassessed the outlook for artificial intelligence infrastructure following a sweeping Democratic victory in the midterm elections. The tech-heavy Nasdaq fell 4.8% in midday trading — its steepest drop since President Trump's "Liberation Day" tariff announcement on April 2, 2025 — while the S&P 500 shed 3.6% and the Dow Jones Industrial Average declined 2.8%.
The sell-off was concentrated in AI-related names. Nvidia dropped 8.2%, Micron tumbled nearly 14%, and Intel fell 6.8%. Data centre operator CoreWeave slid over 12%, cloud infrastructure firm Nebius Group lost nearly 17%, and AI server maker Dell fell close to 13%. Broader tech names were also lower, with Amazon off 2% and Meta down 3.8%.
The catalyst was a string of ballot measures: voters approved restrictions on 39 of 45 data centre initiatives across the country, with only North Dakota voting against restrictions. UBS analysts estimated the results could put roughly 30% of planned US data centre capacity additions for 2028 at risk.
Elon Musk's companies also suffered — SpaceX fell 9.5% and Tesla dropped over 11% — after Musk spent nearly half a billion dollars backing Republican candidates in Texas who lost, including $230 million against Senate candidate James Talarico and $500,000 in the lieutenant governor's race, which Democrat Vikki Goodwin won.
Gold rose to a two-week high, with spot prices climbing just over 1% to $4,115 per ounce. European equity markets were also pulled lower as investors globally weighed the implications of the Democratic sweep for AI investment.
