Technology stocks around the world suffered significant losses after the US midterm election results fueled concerns regarding potential restrictions on artificial intelligence infrastructure. Democratic victories in the US Senate and House of Representatives have placed Congress under Democratic control for the remainder of President Donald Trump’s term, following campaigns focused on increasing oversight of AI and slowing data centre expansion.
On Wall Street, major indexes experienced steep drops. The Nasdaq composite index fell by over 5.5% on Thursday, erasing an estimated $2.5 trillion in market value, according to Dow Jones data. The S&P 500 closed down 4.4%, while the Dow Jones Industrial Average dropped more than 3.4%. The sharp decline pushed the Nasdaq into correction territory, defined by analysts as a fall of at least 10% from recent high points.
Global Market Fallout
The market downturn extended to European and Asian trading sessions. In Europe, semiconductor equipment maker ASML fell by 6.5%, while chipmaker Infineon dropped more than 8.5%. In Asia, Japan’s Nikkei 225 dropped 6.3%, with memory chip manufacturer Kioxia sliding nearly 11.5% and Tokyo Electron losing 5.8%. South Korea’s Kospi index triggered a temporary circuit breaker to halt trading after plummeting over 8% in the morning, eventually closing around 5% lower. Taiwan’s Taiex recorded its largest weekly fall since 2001, declining 4.5% on Friday.
Major US semiconductor and technology firms saw substantial market value losses. Nvidia shares fell over 9%, reducing its market capitalization by more than $400 billion. AMD and Micron both plunged over 17%, Intel dropped 10.3%, and SanDisk lost more than 22%. The Philadelphia Semiconductor Index declined by over 12%. Additionally, Elon Musk’s Tesla and SpaceX dropped nearly 11% and 8% respectively, erasing more than $300 billion in value.
Political and Industry Reactions
The election outcome highlighted growing political opposition to data centre developments across several US states. In Texas, Democratic governor-elect Gina Hinojosa ran on promises to institute a moratorium on new data centre construction. Democratic Senator Bernie Sanders reiterated calls for nationwide restrictions, stating online that safeguards are needed regarding the environmental and workforce impacts of large-scale tech facilities.
President Donald Trump criticized the election outcomes on social media, attributing the market decline directly to political opponents. Meanwhile, leaders in the technology industry acknowledged the public pushback. At a conference in California, OpenAI president Greg Brockman noted that the sector was surprised by the local resistance to infrastructure project expansion and emphasized the need for better community engagement. Meta executive Dina Powell McCormick stated that the industry must work harder to communicate the positive aspects of artificial intelligence development.
Wealth Club chief investment strategist Susannah Streeter noted that existing concerns about whether heavy capital spending on AI will deliver expected financial returns are now colliding with prospective delays in physical infrastructure expansion. Some market participants also expressed ongoing worries that AI-related equities may be facing a broader market correction.
Source: BBC News
