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Nasdaq Falls 5.5%, Chip Index Drops Over 12% as AI Stocks Sell Off After US Midterms
On Thursday, November 5, the Nasdaq Composite fell 5.52% and Nvidia dropped about 9%. Investors are pricing in the risk that data center construction in the US will become slower and more expensive after the midterm elections.
Wall Street enjoyed one day of euphoria after the midterm elections, then on Thursday, November 5, 2026, suffered a sharp selloff in AI-linked stocks. According to Fox Business, the Nasdaq Composite closed 5.52% lower, while the Philadelphia Semiconductor Index lost more than 12%.
How the Session Unfolded
Wednesday brought a rebound: according to Fortune, the Dow gained 1,569 points, or 3%, its best post-midterm performance in 44 years. On Thursday the market reversed. Fortune reports that more than $2 trillion in value disappeared in the first hour of trading, and puts the total loss at about $3 trillion.
Companies in the AI supply chain were hit hardest. According to Fox Business, Tesla lost about 10.77%, SpaceX 9.05%, and IREN, Applied Digital and Nebius Group each fell more than 14%. Fortune says AMD and Micron dropped about 15% during the session, and Qualcomm 11.2%. Large platform companies fared better: Meta fell 3.96%, Alphabet 2.20% and Amazon 2.19%.
Why the Market Reacted
Jakub Rochlitz, an analyst at eToro, calls the election results the obvious catalyst for the selloff. He said rising electricity prices have turned data center construction into a political issue, and some Democrats are calling for restrictions or pauses on new projects.
The market’s interpretation is that the AI infrastructure buildout will become slower and more expensive, which is rewriting growth expectations across the whole supply chain. - Jakub Rochlitz, eToro analyst
Fortune points to specific political signals: 41 ballot measures on slowing data center construction, most of which passed, especially in Ohio. Gina Hinojosa, who wants an immediate moratorium, beat Gov. Greg Abbott in Texas. Wells Fargo estimates that 27% of planned data center gigawatts are in Texas.
Fortune adds a caveat: the link to the elections explains only part of the move, and Abbott already paused new data center permits in September pending a grid audit, so Hinojosa may not need a new law. The paper also cites weaker tech earnings and a rebound in oil prices after Wednesday's drop.
Asia and the Days Ahead
The selloff began overnight in Asia. According to Fortune, the Kospi fell 5.28% with trading halts, Taiwan's main index 3.2% and the Nikkei 1.79%. Fox Business notes that the Nikkei and Kospi, both up more than 20% this year, could fall again on Friday.
This feels like the capitulation phase for the data center capex beneficiary stocks, especially the semiconductors. But I think the magnitude of the moves is outsized. - Jed Ellerbroek, Argent Capital Management, told Reuters
What It Means
For readers in Poland, it is a signal that AI stock prices depend not only on company results but also on local energy policy and regulation in the US. Fortune writes that, according to some analysts, political pushback could let air out of the AI bubble without popping it. The Wednesday and Thursday figures come from intraday quotes and closing prices. Fortune puts the total loss in market value at about $3 trillion, with more than $2 trillion vanishing in the first hour of trading.
