Global Tech Stocks Plunge After US Midterms Spark AI Slowdown Fears

UPDATE - follow-up to Major tech stocks plunge as US midterms add to fears of AI slowdown: Hundreds of billions of dollars in market value vanished from major tech firms across the US and Asia following a severe stock market rout triggered by the US midterm elections. The heavy losses came as Democratic election campaigns focused heavily on slowing down artificial intelligence and restricting data centre construction.

Market Losses

The Nasdaq composite index closed down by more than 5.5%, losing an estimated $2.5tn in market value according to Dow Jones data, marking its worst day since 2025. The S&P 500 fell 4.4% while the Dow Jones Industrial Average closed down over 3.4%. In Asia, Japan's Nikkei 225 dropped 5% in early trading with Panasonic losing over 10% and Hitachi slipping nearly 8%. South Korea's Kospi fell over 8.5%, driven down by chipmaker SK Hynix dropping 11.5% and Samsung falling nearly 10%.

Chipmakers And Tech Giants Hit

Individual tech giants suffered steep drops. Nvidia shares slid more than 9%, erasing over $400bn in market value. AMD and Micron both dropped by more than 17%, Intel fell 10.3%, and SanDisk plunged over 22%. The Philadelphia Semiconductor Index fell more than 12%. Elon Musk's companies SpaceX and Tesla plunged 8% and nearly 11% respectively, wiping over $300bn from their market value. Musk had spent nearly $450m backing Republican campaigns, including at least $45m for Ken Paxton's Texas senate run. In total, the magnificent seven tech companies including Apple, Nvidia and Tesla shed a trillion dollars in value in a single day, pushing the Nasdaq into correction territory.

Political Reactions

Democrats won both the US Senate and House of Representatives in Tuesday's midterms, taking control of Congress for the rest of President Donald Trump's presidency. Texas Democratic governor-elect Gina Hinojosa campaigned against data centres and pledged a moratorium on new construction. President Donald Trump blamed his political opponents on social media for the market slide, misspelling Democrats as "Dumocrats". Senator Bernie Sanders posted on X demanding a national data centre moratorium. Susannah Streeter, chief investment strategist at Wealth Club, noted that fresh panic over the AI trade has hit Wall Street hard amid worries that massive infrastructure spending may not deliver expected returns.

Context

Stock markets regularly react to shifts in political power, especially when election outcomes signal major changes to government regulations and business oversight. The technology and semiconductor sectors are particularly sensitive to shifts in public policy because their growth relies heavily on continuous investment, large power supplies, and minimal regulatory hurdles.