Bad newsNasdaq Drops 5.5% and Loses About $2.5 Trillion as AI Data Centre Fears Spread
The Nasdaq fell 5.5% on 5 November into a correction, with an estimated $2.5 trillion of value gone, as investors feared that Democratic wins in the midterms will slow the data centre build-out behind the AI boom.
This story runs on the bad side only. The biggest stories of the day are told on both sides.
The Nasdaq Composite fell 1,422 points, or 5.5%, to close at 24,315 on Thursday, CBS News reports. That puts the tech-heavy index in a correction, more than 10% below its record high set in October. The BBC estimates that the day erased $2.5 trillion of market value, citing Dow Jones data, and calls it the worst day for key US indexes since 2025.
The S&P 500 dropped 335 points, or 4.4%, to 7,354. The Dow Jones Industrial Average lost 1,833 points, or 3.4%, wiping out Wednesday’s rally, when it posted its biggest gain of the year after the midterm results cleared up who would control Congress.
Chipmakers took the worst of it
Companies tied to the AI build-out fell hardest. CBS says Nvidia lost 9.2%, a day after a 3.2% drop, and the BBC puts that at more than $400 billion of value. AMD fell 17.3%, according to CBS, and the BBC says Micron fell by a similar amount. Intel dropped 10.3% and SanDisk more than 22%. The Philadelphia Semiconductor Index, which tracks 30 of the largest chip firms, fell by more than 12%.
CoreWeave, which rents out AI chips through the cloud, lost 9.8%. Trump Media & Technology Group, owner of Truth Social, fell 10.5% after dropping nearly 25% on Wednesday. CBS says its shares hover around $4, the lowest since the company listed in March 2024. The BBC adds that SpaceX and Tesla shares fell about 8% and nearly 11%, taking more than $300 billion off the two firms. In total, the so-called Magnificent Seven tech companies lost around a trillion dollars in value in one session, the BBC says.
The trigger, analysts say, is politics. Democrats campaigned against data centres, and dozens of ballot measures across the country aimed to restrict them, according to the BBC. Texas governor-elect Gina Hinojosa pledged a moratorium on new construction. Joe Maher of Capital Economics wrote that investors fear Democrats will regulate AI and restrict data centre development. That would slow the spending that chip and cloud firms depend on.
The sell-off also exposes an older worry. Investors have asked for months whether the huge sums poured into AI will earn a return, and CBS notes the concern that valuations have detached from company fundamentals. Maher said the midterms strengthen his view that the boom is in its final innings, though he allowed that it is not yet clear the vote will derail it. That is one analyst’s judgement, not a fact.
Some technology executives say the backlash caught them off guard. OpenAI president Greg Brockman said he believed everyone had been surprised by the reaction to data centres and that the industry needs to do more to work with communities, the BBC reports.
Neither source says whether the drop will continue, and one day’s move says little about the next. What is certain is the arithmetic: about a trillion dollars left the biggest names in a single trading day. The argument over who pays for the power and land that AI needs has moved from local hearings to the stock market.
