Tech and AI shares plunge after US midterms as Nasdaq loses $2.5tn
Democratic midterm wins and pledges to slow AI data centres triggered a global sell-off, with Nasdaq down 5.5% and Asian chip stocks falling sharply.
At a glance
- The Nasdaq closed down more than 5.5%, losing an estimated $2.5tn in market value after the US midterm elections.
- Asian chip stocks fell sharply, with the Nikkei 225 down 6% early Friday and South Korea's Kospi triggering a circuit breaker.
- Nvidia, AMD, Micron, Intel and Tesla were among major firms whose shares dropped, while SpaceX fell 8%.
Tech and artificial intelligence stocks in the US and Asia plunged on Thursday and Friday after Democratic wins in the US midterm elections raised concerns about a slowdown in AI development.
The tech-heavy Nasdaq composite index closed down by more than 5.5%, losing an estimated $2.5tn (£1.9tn) in market value, according to Dow Jones data. Other key US stock indexes also saw big losses in their worst days since 2025.
The sell-off came on top of broader concerns about whether the huge amounts being spent on AI will pay off. Democrats in races across the US campaigned to slow the growth of data centres and AI, and dozens of ballot measures sought to restrict the hubs needed to power the technology. They won both the Senate and House of Representatives in Tuesday's midterms, taking control of Congress for the rest of President Donald Trump's presidency.
Asian markets hit
In Asia, tech-heavy indexes fell sharply on Friday morning. Japan's Nikkei 225 was 6% lower in early trading as memory chip maker Kioxia lost over 12.6% and rival Tokyo Electron slipped by 9.5%. South Korean chipmaker SK Hynix fell by more than 11.5%, while Samsung was down by nearly 10%. The sell-off in Seoul sent the Kospi index plunging more than 8.5%, triggering a circuit breaker designed to halt trading temporarily to curb panic selling.
Chipmakers and Musk firms slide
Shares in companies heavily exposed to AI data centres, including chipmakers and semiconductor manufacturers, fell sharply on Thursday. Nvidia shares slid more than 9%, knocking more than $400bn off the firm's market value. AMD and Micron both dropped by more than 17%. Intel shares fell 10.3%, while memory card maker SanDisk plunged more than 22%. The Philadelphia Semiconductor Index fell by more than 12%.
Shares in Elon Musk's companies SpaceX and Tesla also plunged, falling 8% and nearly 11% respectively and shaving more than $300bn off the firms' market value on Thursday. Musk had spent nearly $450m backing Republican campaigns, including at least $45m in support of Ken Paxton for the Texas senate seat, but Texas was turned blue in the Democratic wave on Tuesday night.
In total, the so-called magnificent seven tech companies, including Apple, Nvidia and Tesla, shed a trillion dollars in value in a single trading day. The S&P 500 fell by 4.4% by the end of trading, while the Dow Jones Industrial Average erased gains made on Wednesday to close down more than 3.4%. The Nasdaq Composite fall was so large it is now in what market watchers call correction territory, where an index or company value falls at least 10% below its recent high.
Political reaction and industry response
Trump blamed the slide on his political opponents. "The Stock Market suffered one of the Worst Days in History based on the results of the Election," he said. "Remember, it wasn't Republicans, it was Dumocrats. Do not fear, however, we will soon, one way or the other, be BIGGER AND STRONGER THAN EVER BEFORE. MAKE AMERICA GREAT AGAIN!"
Some Democrats have argued that AI has grown too big without safeguards or oversight and have promised to change that with their new power in Congress. "Americans don't want Big Tech oligarchs wrecking the environment, gutting jobs and threatening humanity's future. NATIONAL DATA CENTER MORATORIUM NOW," Democrat Senator Bernie Sanders said in a post on X on Thursday.
Some tech leaders said they were caught off guard by the backlash against data centres, with OpenAI's Greg Brockman saying more work was needed to ensure communities were on board.
Source: BBC Technology.
Questions and answers
- Why did tech and AI stocks fall after the US midterms?
- Democratic midterm wins and campaigns to slow AI data centre construction raised fears of a slowdown in AI development, adding to concerns about whether huge AI spending will pay off.
- How much market value did the Nasdaq lose?
- The tech-heavy Nasdaq composite closed down more than 5.5%, losing an estimated $2.5tn in market value, according to Dow Jones data.
- Which companies' shares fell?
- Nvidia fell more than 9%, AMD and Micron dropped over 17%, Intel fell 10.3%, SanDisk plunged over 22%, and SpaceX and Tesla fell 8% and nearly 11%.
