Investors wipe US$2.5 trillion off Nasdaq as Democratic sweep prompts AI fears

South China Morning Post · Reuters · 2026-11-05 21:19 UTC

Midterm victory sparks investor concerns that the buildout of data centres could stall.

Tech-led Nasdaq notched its deepest one-day drop since ‘Liberation Day’ in April 2025, wiping out trillions in market value on fears of more AI scrutiny, particularly on data centre construction, after Democrats won big in US midterm elections.

The Nasdaq Composite fell 5.5 per cent on investor fears that the Democratic Party’s sweeping midterm victory could stall AI infrastructure expansion and force a reckoning for smaller firms whose capacity to raise funds has already been limited by higher interest rates and tighter financial conditions.

It was the second straight day of selling in AI ‌stocks and the fifth decline of more than 500 points in the Nasdaq Composite since mid-October, as the previously buoyant AI trade has come under increasing scrutiny in the last several weeks.

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