Tech Giants Lose Billions on Wall Street Following US Midterm Election Results

Major tech companies including Nvidia, SpaceX, and Tesla lost hundreds of billions of dollars in market value after Democrats swept to victory in the US midterm elections. Shares in the tech and artificial intelligence sectors plunged due to fears of tougher government rules in key data centre states like Texas, Ohio, and Georgia.

Market Impact

The losses pulled the Nasdaq Composite down by more than 5.5%, marking its biggest one-day drop in 19 months and pushing the index into correction territory. The S&P 500 fell 4.4%, and the Dow Jones Industrial Average dropped over 3.4%. Nvidia shares slid more than 9%, erasing over $400 million in value. Other chipmakers also dropped sharply, with AMD and Micron falling over 17%, Intel down 10.3%, and SanDisk plunging over 22%. The Philadelphia Semiconductor Index dropped more than 12%. Elon Musk's firms SpaceX and Tesla fell 8% and nearly 11% respectively, losing over $300 million in value after Musk spent nearly $450 million backing Republican campaigns, including at least $45 million for Ken Paxton in the Texas senate race.

Industry Reaction

Susannah Streeter, chief investment strategist at Wealth Club, stated that fresh panic had hit Wall Street as fears over AI returns collided with the threat of slower data centre building. Tech leaders admitted being caught off guard by the voter backlash. OpenAI president and co-founder Greg Brockman noted at the WSJ Tech conference in Napa, California, that firms must engage directly with local communities rather than just tweeting. Meta president Dina Powell McCormick added that the industry needs to work much harder on explaining the benefits of AI.

Context

Stock markets often react quickly to major political shifts because changes in government leadership can lead to new laws, taxes, or business rules. Data centres require massive amounts of power and land, making them a common subject for local political debates and community concerns.