Investors were set to lose more than US$2 trillion in Nasdaq 100 market value as fears grew that Democratic control of Congress could slow the expansion of artificial-intelligence infrastructure.
The Democratic Party won control of the US Senate and House of Representatives in midterm elections held on 3 November. Investors saw that result as damaging for the AI buildout and sold amid fears that the artificial-intelligence trade was ending.
The selling drove big technology stocks to their sharpest decline since the 'Liberation Day' rout in April 2025. The S&P 500 lost an estimated $2.9 trillion in market capitalisation, its largest one-day loss of market value on record.
The Magnificent 7, Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia and Tesla, lost nearly $1.04 trillion in total. Nvidia alone lost $374 billion in market value.
Semiconductor shares were hit especially hard. The Semiconductor Index, known as SOX, fell 12.25%, while the iShares Semiconductor ETF dropped more than 12% in its worst day since March 2020.
The pressure extended to smaller AI infrastructure companies. Nebius fell 15%, CoreWeave dropped 10% and Applied Digital declined nearly 15%.
These smaller firms, described as neoclouds, have faced financing concerns since US interest rates rose late in the summer. Higher interest rates and tighter financial conditions have limited their ability to raise funds.
The rout came during what has been a punishing autumn for the AI trade. The VIX rose 69.66% on Thursday, while Qualcomm fell 9% after issuing a weak forecast that it attributed to rising costs.
Comments (0)