Key takeaways:
- The Nasdaq fell about 5% in early-afternoon trading, while the S&P 500 lost roughly 3.7% and the Dow dropped about 2.9%, CBS News reported.
- Stocks rallied Wednesday after the election, then fell Thursday as investors weighed possible political resistance to AI infrastructure.
- Al Jazeera reported that voters backed 39 measures to restrict AI; it reported the ballot results separately from the market’s reaction to the election.
U.S. stocks fell sharply Thursday, led by chipmakers and other companies tied to artificial intelligence, as investors reassessed what Democrats’ sweeping midterm election victories could mean for the construction of data centers that power AI services.
The tech-heavy Nasdaq Composite fell about 5% in early-afternoon trading, while the S&P 500 lost roughly 3.7% and the Dow Jones Industrial Average dropped about 2.9%, CBS News reported. Market watchers believe Democrats’ gains could strengthen opponents of data centers and slow the facilities’ rollout, according to CBS News.
The decline followed a different reaction Wednesday, when stocks rallied after the election. Al Jazeera reported that Democrats’ wins had signaled limits on policy shocks from a Congress at odds with the White House. Investors were also reassured by President Donald Trump’s remarks that he would accept the results, the outlet said. By Thursday, attention had shifted to what the results might mean for AI infrastructure.
“Yesterday, markets rallied on certainty as election results removed a layer of uncertainty. Today, portfolio managers and analysts are digging into the implications and adjusting expectations for potential political resistance to AI infrastructure, particularly at the state and local levels,” Michael Monaghan, portfolio manager of Founders 100 ETF, told Al Jazeera. “We’re seeing that concern reflected in the selloff across semiconductors and hyperscalers.”
Separately, voters backed restrictions in most of the 45 data center ballot initiatives around the country, Al Jazeera reported. Citing Data Centers on the Ballot, it said 39 measures to restrict AI succeeded, while voters rejected restrictions in one North Dakota measure. UBS analysts estimated that potential construction pauses could put roughly 30% of planned U.S. data center capacity additions in 2028 at risk, according to Reuters, as cited by Al Jazeera.
Nvidia, a leading maker of AI chips, fell 7.5% in CBS News’ early-afternoon account, a day after dropping 3.2%. Advanced Micro Devices tumbled 14.6%, while CoreWeave, which rents customers access to AI chips through the cloud, fell 12.1%. In Al Jazeera’s midday snapshot, Nvidia was down 8.2% and CoreWeave was down more than 12%. It reported that Micron fell nearly 14%, Intel dropped 6.8%, data center company Nebius Group sank nearly 17% and AI server maker Dell lost nearly 13%.
The losses extended beyond those companies. Al Jazeera reported that Amazon fell 2%, Meta dropped 3.8%, SpaceX lost 9.5% and Tesla declined more than 11%. The outlet reported that Elon Musk spent nearly half a billion dollars on the midterm elections. It separately detailed his spending against Democratic candidates in Texas, where SpaceX and Tesla are headquartered: $230 million to defeat U.S. Senate candidate James Talarico, $5 million to back Gina Hinojosa’s opponent in the governor’s race and $500,000 in the lieutenant governor’s race, which Democrat Vikki Goodwin won. The candidates Musk opposed won their races, Al Jazeera reported.
Outside U.S. stocks, technology shares pulled a European benchmark index lower, Reuters reported, according to Al Jazeera. Spot gold reached a two-week high of $4,115 an ounce, up just over 1%, Al Jazeera reported. Brent crude rose 2.6% to $97.11 a barrel after falling nearly 9% the previous day, CBS News reported.
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