NEW YORK. On Thursday, November 5, U.S. stocks had one of their worst days in years. The Nasdaq fell 5.5 percent and about $2 trillion in market value disappeared in a single session, according to Reuters. A day earlier, the same investors had cheered the same election results and pushed the Dow up more than 1,500 points. No law had passed in between. What changed was what investors think a Democratic Congress means for the data centers behind the AI boom. Zark News reported the sell-off as it closed.
Why it matters
A small group of technology companies now carries a large share of the stock market, and with it a large share of people’s retirement savings. Their high prices rest on one bet: that hundreds of billions spent on chips and data centers will pay off. Thursday showed how fast that bet can be repriced. Data centers need land, power and water, and all three are now political arguments. If building slows, the earnings investors count on arrive later, or not at all.
What we know
- The falls were broad and steep. The Nasdaq fell 5.5 percent, its deepest one-day drop since the April 2025 tariff sell-off; the S&P 500 fell 4.4 percent, the Dow 3.4 percent, and technology shares 7.3 percent, according to Reuters.
- Chip makers were hit hardest. The Philadelphia semiconductor index fell 12 percent, its second-biggest fall on record and its worst day since March 2020, according to Reuters. SanDisk fell 22 percent, Micron, AMD and Marvell about 17 percent each, and Nvidia fell 9 percent.
- The Nasdaq is now in a correction. About $2 trillion was wiped off its value on Thursday, according to Reuters, leaving it more than 10 percent below its record of a month earlier, into what traders call a correction. (Some tallies put the loss at $2.5 trillion.)
- The trigger was political, not a company failure. Investors said Democrats winning Congress and key governorships could bring tougher rules and local limits on data centers, according to Reuters and The Times. UBS estimated about 30 percent of U.S. data center capacity expected in 2028 could be at risk from construction pauses.
- The selling reached the loan market. Dutch lender ING is putting about $500 million of data center loans up for sale, including a $25 million loan tied to a Stargate AI project in New Mexico, Bloomberg News reported. Reuters could not verify that report, and ING did not immediately comment.
What we still don’t know
- Whether any rule will actually slow data centers. The new Congress does not sit until January, no bill has been written, and most permits are state and local decisions.
- Whether companies will cut spending. No major AI company announced a cancelled project on Thursday. The market priced a risk to future orders, not a lost order; company guidance in coming weeks is the real test.
- How much was politics, and how much old worry. Doubts about whether AI spending earns its cost predate the election: the Nasdaq-100 had already slipped into correction on Monday, November 2, according to Reuters.
- Whether Thursday was the bottom. Keith Lerner of Truist told Reuters there is “something of a buyers’ strike in tech”; the shares look oversold, he said, but must first find a floor.
What’s next
October inflation figures are due on Tuesday, November 10, and the Federal Reserve decides on rates on December 9; Friday’s strong jobs report pushed up bets on a December rise, according to Reuters. Bids on ING’s data center loans are due November 19, a real-money test of lenders’ appetite. In January the new Congress is seated, and any data center bills will show whether Thursday’s fear becomes policy.
Timeline
- October 6, 2026: The Nasdaq closes at a record high, according to The Times.
- November 2, 2026: The Nasdaq-100 slips into correction on AI-spending doubts, according to Reuters.
- November 3, 2026: Democrats sweep the midterms, winning both houses of Congress.
- November 4, 2026: Relief rally: the Dow rises more than 1,500 points and oil falls below $100, as Zark News reported.
- November 5, 2026: The rout: Nasdaq down 5.5 percent, chip index down 12 percent, about $2 trillion wiped out, according to Reuters.
- November 6, 2026: October jobs beat forecasts: 165,000 added, unemployment 4.1 percent (Bureau of Labor Statistics).
