Wall Street suffered a massive selloff on Thursday, led by technology stocks, as the Democrats’ midterm victories fueled fears over the future of President Donald Trump’s ambitious AI investment drive.
The Democratic Party secured majorities in both the House of Representatives and the Senate in Tuesday’s elections, wresting control of Congress from Republicans. Candidates campaigning against new data center development also won gubernatorial races in Texas and Georgia, two states that have long offered tax incentives to attract technology investment.
The tech-heavy Nasdaq Composite plunged more than 5.5% during Thursday’s trading, erasing more than $2 trillion in estimated market value. The S&P 500 sank over 4%, while the Dow Jones Industrial Average, which has less exposure to technology stocks, dropped more than 3%.
Semiconductor giants Nvidia, Advanced Micro Devices (AMD), Micron and Broadcom were among the hardest hit as investors dumped shares in companies at the heart of the AI boom.
AMD and memory chipmaker Micron plunged more than 17%, while Nvidia shed 9.3% and Broadcom lost more than 10%.
The Philadelphia Semiconductor Index, which tracks major US-listed chipmakers, tumbled more than 12% – its steepest intraday decline since March 2020, according to Dow Jones Market Data.
The rout also swept through America’s biggest technology companies, with Google parent Alphabet, Microsoft, Apple, Amazon, and Meta posting losses of between 2% and 4%.
Thursday’s plunge deepened a downturn that had already battered the technology sector in October, when an estimated $2 trillion was erased from the Nasdaq-100. Investors have grown increasingly skeptical that the enormous sums being poured into AI infrastructure will generate sufficient returns.
The election results have added a new layer of uncertainty, raising concerns that a Democrat-controlled Congress could challenge the administration’s support for rapid AI expansion, including incentives for energy-intensive data centers.
The Trump administration has touted more than $3 trillion in technology and AI investment commitments since January 2025, although much of the pledged funding has yet to be spent.