Major tech stocks plunge as US midterms add to fears of AI slowdown

ByRachel Clun Business reporter, Reporting fromNew York. 5 November 2026, 16: 44 GMT.

Key points

• Shares in Elon Musk's firms SpaceX and Tesla additionally plunged, falling 8% and almost 11% respectively and shaving more than $300bn off the firms' market value on Thursday.
• Susannah Streeter, chief investment strategist at Wealth Club, remarked the steep sell-off on the Nasdaq and the S&P 500 was sending shockwaves into other markets.
• Nvidia shares slid more than 9%, knocking more than $400bn off the firm's market value.
• Other chipmakers additionally suffered, with AMD and Micron both dropping by more than 17%.
• It tracks the performance of 30 of the largest firms involved in semiconductor production, fell by more than 12%.

Hundreds of billions of dollars in market value has been wiped from major tech firms in a stock market rout after the US midterm elections sparked reservations of a slowdown in AI development.

After Democratic wins after election campaigns run on slowing AI, shares in firms throughout the tech and artificial intelligence sectors plummeted.

While other key US stock indexes additionally saw sizeable losses in their worst days since 2025, the tech-heavy Nasdaq composite stock index closed down by more than 5.5% to lose an estimated $2.5tn in market capitalisation, according to Dow Jones data.

Notably, the sell-off comes on top of broader reservations concerning whether the massive amounts being spent on AI will pay off.

Democrats in races throughout the US campaigned to slow the onslaught of data centres and AI, and there were dozens of measures on ballots around the country aimed at restricting the development of the hubs crucial for powering the technology.

Texas governor-elect Gina Hinojosa campaigned heavily against data centres, pledging a moratorium on new construction in the sector.

Shares in firms heavily exposed to AI data centres, including crucial chipmakers and semiconductor manufacturers, fell sharply on Thursday, highlighting investor worries that had already been growing.

Other chipmakers additionally suffered, with AMD and Micron both dropping by more than 17%. While memory card maker SanDisk plunged more than 22%, intel shares additionally dropped, down 10.3%.

Meanwhile, the Philadelphia Semiconductor Index. It tracks the performance of 30 of the largest firms involved in semiconductor production, fell by more than 12%.

Musk had spent almost $450m backing Republican campaigns, including at least $45m in backing of Ken Paxton for the Texas senate seat, but Texas was turned blue in the Democratic tsunami on Tuesday night.

In total, the so-called magnificent seven tech firms, including Apple, Nvidia and Tesla, have shed a trillion dollars in value in a single trading day.

For context, the stock falls additionally hit other major US stock indexes. While the Dow Jones Industrial Average erased gains created on Wednesday to close down more than 3.4%, the S&P 500 index fell by 4.4% by the end of trading.

Meanwhile, the Nasdaq Composite fall was so sizeable it is now in what market watchers call correction territory. It is where an index or business value falls at least 10% below its recent high.

"Fresh panic over the AI trade has hit Wall Street hard, " she remarked.

"Fears that the vast sums poured into AI infrastructure may not deliver the returns investors have been banking on are now colliding with the prospect of a sharp slowdown in data centre construction."

Some tech leaders have remarked they were caught off guard by the backlash against data centres in the midterms.

OpenAI president and co-founder Greg Brockman remarked he believed everyone had been surprised by the reaction to data centres, and more work needed to be done to ensure communities were on board.

"A lot of our shift over the course of this year has really been to realise that from San Francisco trying to build infrastructure in Texas, Georgia, and other places, you can't just tweet and say: 'This is going to be good.' You need to be in those communities, " Brockman remarked at the WSJ Tech conference in Napa, California on Wednesday evening.

According to Meta's president Dina Powell McCormick, the industry needed to put more effort into selling AI as a good idea.

"I think we need to double and triple down on telling the story, " she informed the WSJ conference.

Alongside the immediate impacts of the US mid-term elections, some investors have become concerned that AI shares could be in a bubble that is due a correction. With extra reporting from Lily Jamali.

Taken together, the developments around major tech stocks plunge as US midterms add to fears of AI point to a situation that is still moving, and the coming days should bring more clarity.