On Thursday, the U.S. stock market tumbled sharply, erasing all of the gains made by the market after the mid-term elections. Due to investors' concerns about a slowdown in data center construction, the market accelerated its withdrawal from tech stocks.
The Nasdaq Composite Index fell by 5.4%, entering a technical correction zone, more than 10% below its historical high set last month. The S&P 500 Index declined by 4.3%. The Dow Jones Industrial Average lost 1,844 points, a drop of 3.7%, essentially erasing all the gains from the significant rebound after the elections on Wednesday. The small-cap Russell 2000 Index also fell by 4.4%, entering a technical correction zone as well. All three major stock indices are likely to record their worst single-day performance since April 2025.
Stocks related to the artificial intelligence investment boom, especially those in the chip industry and the data center supply chain, fell for the second consecutive trading day. Investors are concerned that the Democratic Party's simultaneous victory in both houses of Congress and its success in key gubernatorial elections could lead to a slowdown in the pace of data center construction.
For example, Bernie Sanders ( Bernie Sanders ), a senator from Vermont who forms part of a caucus with the Democratic Party, has called for a nationwide pause on data center construction. Sanders posted on social media on Wednesday evening, saying: "The American people do not want oligarchs from large tech companies to destroy the environment, erode jobs, and threaten the future of humanity."
Chip manufacturers Broadcom (Broadcom) and NVIDIA (Nvidia) both fell by 9% on Thursday, while software company Oracle (Oracle) declined by 7%. Another chip company, Qualcomm (Qualcomm), reported financial results that exceeded market expectations, but its stock price still fell by 10% due to weaker-than-expected performance guidance. The semiconductor industry (ETF) fell by more than 10%, setting what is expected to be the worst single-day performance since the outbreak of the COVID-19 pandemic in March 2020.
The stock prices of emerging cloud computing companies have also seen a decline. CoreWeave has fallen by 11%, while Nebius and Iren have both fallen by 16%. There are concerns in the market that the results of the state elections may trigger a wave of opposition against this industry.
Tim Holland, the Chief Investment Officer of asset management firm Orion, stated: "Investors are temporarily stepping back, waiting to gain a clearer understanding of the impact of the mid-term elections on the cycle of artificial intelligence capital spending. Over the past three years or so, artificial intelligence capital spending has been one of the biggest drivers of economic growth. The key question is how the policy tone and attitude of the political parties that have achieved significant victories at both the federal and state levels will change."
The selling pressure on Thursday was intense and spread to other sectors of the market. Industrial giant Caterpillar (Caterpillar) saw its stock price fall by 5%, while financial firm JPMorgan Chase (JPMorgan) declined by 4%. Aerospace company Boeing (Boeing) and retailer Nike (Nike) both lost 3%.
Truist Wealth Chief Investment Officer Keith Lerner ( Keith Lerner ) stated: "Unlike yesterday, the scale of selling in tech stocks has now begun to spread across the entire market, creating a self-reinforcing situation. The market's rubber band is being stretched tighter and tighter."
Earlier on Wednesday, after the Democratic Party achieved a decisive victory in the mid-term elections, the Dow Jones Industrial Average soared by more than 1,500 points, recording its best single-day performance since April 2025. The S&P 500 Index and the Nasdaq Composite Index also rose by over 1%. However, sectors related to artificial intelligence were under pressure at that time, while stocks that are more sensitive to the economic situation saw increases.
Responsible Editor: Li Antong
