Over $2 trillion wiped off Nasdaq as AI stocks tumble after US midterm elections

US technology stocks suffered heavy losses Thursday as concerns over artificial intelligence spending and possible restrictions on data centre construction rattled investors. The Nasdaq fell 5.5%, entering correction territory, while the S&P 500 dropped 4.4% and the Dow lost 3.4%. Nvidia, AMD, Micron, Tesla and SpaceX were among the companies affected. Democratic midterm victories, particularly in Texas, intensified fears that tougher regulations could delay infrastructure projects and undermine expected returns from costly AI investments nationwide.

Major US technology stocks plunged Thursday as concerns over artificial intelligence spending and potential restrictions on data centre construction triggered a Wall Street sell-off.

According to the BBC, the Nasdaq Composite fell 5.5%, entering correction territory after losing more than 10% from its recent peak.

The S&P 500 declined 4.4%, while the Dow Jones Industrial Average dropped 3.4%.

Nvidia shares tumbled more than 9%, while chipmakers AMD and Micron recorded steeper losses. Tesla and SpaceX also fell as investors reassessed the outlook for technology companies.

The sell-off followed Democratic victories in US midterm elections, including Texas, where governor-elect Gina Hinojosa campaigned against new data centres.

Investors fear tighter controls could slow construction and weaken demand for advanced chips.

“Fresh panic over the AI trade has hit Wall Street hard,” Wealth Club strategist Susannah Streeter said.

Analysts also warned that enormous investments in AI infrastructure might fail to produce expected returns, adding to market uncertainty and intensifying pressure on valuations.