US stocks lost roughly $2.5 trillion in value on 5 November as the Nasdaq fell 5.52%, its worst one-day decline since April 2025, amid fears that Democratic election gains could slow AI data centre construction, CNN reported. The New York sell-off followed US midterm elections that gave Democrats control of both chambers of Congress and elected Gina Hinojosa Texas governor. Hinojosa campaigned on a temporary moratorium on data centres and the removal of some tax incentives for companies building them in the state.
Key points
- The Nasdaq closed at 24,315.00, more than 10% below its 6 October record.
- Nvidia fell 9.3% and a chipmaker index lost 12.3% as investors reassessed spending on AI infrastructure.
- Texas Governor-elect Gina Hinojosa campaigned on a temporary data centre moratorium and changes to tax incentives.
- South Korea’s Kospi fell almost 9% at Friday’s open, triggering a 20-minute trading halt.
Nasdaq reverses post-election gains
The Nasdaq closed at 24,315.00, more than 10% below the record it reached on 6 October. The S&P 500 fell 4.36% to 7,353.73, while the Dow Jones Industrial Average lost 1,833 points to finish at 51,523.06. All three indices had their worst sessions since April 2025.
The losses reversed a post-election rally on 4 November, when the Dow gained 1,569 points and the Nasdaq rose 1.44%. Even during that rally, shares of chipmakers and companies involved in building AI data centres were falling. Selling in those businesses intensified on 5 November and pulled the broader indices lower.
The change in direction reached beyond technology. All 11 sectors of the S&P 500 closed lower. The VIX, an index of expected market volatility, rose roughly 70% in its biggest one-day increase in almost two years. The yield on the 10-year US Treasury fell to 4.84%, its lowest level in two months, as demand for government bonds increased.
Texas proposal puts data centre spending in focus
Hinojosa’s proposal matters to companies with planned data centres in Texas, where Google, Meta, Oracle and OpenAI have made substantial investments. Her campaign called for a temporary halt to data centre construction and for certain tax incentives available to companies building the facilities to be eliminated.
The election result produced two different trades in companies financing the build-out. Shares of Amazon, Meta and Google rose on 4 November as investors considered whether restrictions might reduce their data centre spending and leave more cash available. Those trades reversed on 5 November as investors weighed the effect of slower construction on the wider technology sector.
The policy debate extends beyond Texas. AI Affairs previously reported that voters backed data centre curbs in at least 33 US communities. It also reported Meta’s warning that the midterm results would make US data centre projects harder.
Keith Lerner, chief investment officer at Truist Advisory Services, described the volatile trading as more of a knee-jerk reaction than a reliable indication of how technology shares might perform under Democratic control of Congress, according to CNN.
Nvidia losses spread to Asian markets
Nvidia fell 9.3% on 5 November, erasing its gains for the year, CNN reported. ANI reported a 9% decline. Broadcom lost 10% and Oracle fell almost 7%. A chipmaker index dropped 12.3%, its worst session in roughly six-and-a-half years.
CoreWeave and Nebius, which rent computing capacity to AI customers, fell roughly 10% and 15% respectively. CoreWeave was down 76% from its June 2025 peak, shortly after it went public, while Nebius was down 58% from a peak reached in June 2026.
The selling carried into Asian trading on 6 November. South Korea’s Kospi fell almost 9% at the open and triggered a 20-minute trading halt. ANI reported a fall of more than 7% to 5,035. Taiwan’s weighted index fell 8% to 38,300, Japan’s Nikkei 225 dropped to 57,445, and Singapore’s Straits Times index was down 2.20% at 5,180.
.jpg){kind=link}