Hundreds of billions of dollars in market value was wiped from major technology companies following the US midterm elections, as Democratic campaign victories centred on slowing artificial intelligence development triggered a sharp sell-off in tech stocks. The Nasdaq composite index fell more than 5.5% to shed an estimated $2.5tn in market capitalisation, according to Dow Jones data, marking its worst day since 2025. The S&P 500 fell 4.4% and the Dow Jones Industrial Average dropped more than 3.4%, with the Nasdaq's decline now putting it in correction territory, meaning the index has fallen at least 10% below its recent high.
Semiconductor and chipmaking companies suffered the steepest losses. Nvidia shares slid more than 9%, cutting over $400bn from the firm's market value, while AMD and Micron both dropped more than 17%. Intel fell 10.3% and SanDisk plunged more than 22%. The Philadelphia Semiconductor Index, tracking 30 of the largest semiconductor producers, fell by more than 12%. Shares in Elon Musk's SpaceX and Tesla also plummeted 8% and nearly 11% respectively, removing more than $300bn from both firms' combined market value. In total, the so-called magnificent seven tech companies, including Apple, Nvidia and Tesla, lost a trillion dollars in value in a single trading day.
Democrats across the country campaigned to restrict data centres and AI development, with dozens of ballot measures aimed at limiting the construction of facilities crucial for powering the technology. Texas governor-elect Gina Hinojosa campaigned heavily against data centres, pledging a moratorium on new construction. Musk had spent nearly $450m backing Republican campaigns, including at least $45m supporting Ken Paxton for the Texas senate seat, but Texas turned blue in the Democratic victory. Investors were already growing concerned that the enormous sums being invested in AI infrastructure may not generate the returns they had anticipated.
Susannah Streeter, chief investment strategist at Wealth Club, said the sell-off was sending shockwaves through other markets. "Fresh panic over the AI trade has hit Wall Street hard. 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," she said. OpenAI president and co-founder Greg Brockman acknowledged that tech leaders had been caught off guard by the backlash against data centres. He said the industry needed to do more work to ensure communities supported AI infrastructure development, rather than simply announcing plans. Meta's president Dina Powell McCormick said the industry needed to increase efforts to communicate AI's benefits. "I think we need to double and triple down on telling the story," she told the WSJ Tech conference.
For UK investors and savers with exposure to US tech stocks through funds or direct holdings, the sharp decline in major technology company valuations represents a significant loss of wealth on this single trading day.