US stock markets suffered a brutal sell-off on Thursday, November 5, as investors rushed out of artificial intelligence and semiconductor shares amid growing fears that the boom in AI data centres is running into a political wall. The Dow Jones Industrial Average closed down 1,833.06 points, or 3.44 per cent, at 51,523.06, while the S&P 500 fell 4.36 per cent and the tech-heavy Nasdaq Composite dropped 5.52 per cent.
The slump came two days after Democrats won control of both chambers of Congress in the US midterm elections, and as new data showed how deeply unpopular data centres have become with American voters.
Chip and AI Stocks Hit Hardest
The damage was concentrated in the companies that have powered Wall Street’s AI rally. The Philadelphia Semiconductor Index plunged more than 12 per cent, according to Fox Business and Yahoo Finance. Nvidia, the world’s leading AI chipmaker, sank about 9 per cent, while Tesla fell nearly 11 per cent.
Data centre and AI infrastructure firms were also hammered. IREN, Applied Digital and Nebius Group each lost more than 14 per cent, Fox Business reported, and power companies tied to the data centre boom, such as GE Vernova and Constellation Energy, were caught up in the rout. Yahoo Finance said the Nasdaq-100 index alone lost about $2.3 trillion in market value.
With Thursday’s fall, the Nasdaq is now in correction territory, more than 10 per cent below its record close on October 6.
Why Investors Are Worried
Analysts linked the sell-off to the political shift in Washington. Fox Business reported that investors were weighing what Democrats’ sweeping midterm victories could mean for AI regulation and data centre development, at a time of rising electricity prices and calls from some Democrats to restrict or pause new projects. An eToro analyst told the outlet the AI build-out is likely to become slower and more expensive.
Others pointed to market mechanics. Nomura strategist Charlie McElligott said hedge funds were rushing to lock in their 2026 gains by selling the market’s biggest winners, according to Yahoo Finance. Vanda Research said retail investors were on track for their heaviest day of net selling since March 2020.
Voters Turn Against Data Centres
The sell-off followed clear signs of a public backlash. In an NBC News exit poll cited by The Hill, 76 per cent of voters said they would oppose the construction of a new data centre in their community. Nearly a quarter said data centres were “crucial” to how they voted for Congress, and another third called them a major factor. ABC News also highlighted the 76 per cent figure in its Thursday evening coverage.
The opposition showed up at the ballot box too. According to The Hill, voters sided against data centres in all but one of 41 local ballot measures seeking to restrict their construction, 21 of them in Ohio. In Texas, governor-elect Gina Hinojosa, who defeated Greg Abbott, has promised a moratorium on new data centres. Residents in many areas complain the giant facilities push up power bills and use large amounts of water and land.
Not everyone agrees data centres decided the election. Some strategists quoted by The Hill argued the vote was mainly a referendum on President Donald Trump and the economy.
What Happens Next
Investors will now look to Friday’s US jobs report for signs of the economy’s health, and to any early signals from Democratic leaders on how they plan to approach AI and energy policy when the new Congress sits in January. Analysts expect markets to remain volatile in the coming days.
The turmoil matters well beyond Wall Street. US tech stocks make up a large share of global investment portfolios, and sharp swings in New York often ripple through markets in Europe, Asia and Africa.
Sources: Fox Business, Yahoo Finance, The Hill, NBC News, ABC News.
