Wall Street suffered a massive sell-off on Thursday with tech-heavy Nasdaq plunging more than 5% and the Dow Jones losing over 1,500 points as investors dumped artificial intelligence (AI) stocks following the Democratic Party's sweeping victory in the US midterm elections. The Nasdaq Composite fell 5.2%, while the Dow Jones Industrial Average dropped 1,656 points, or 3.1% during afternoon trading.
The S&P 500 also declined 3.9%, putting it on course for its worst trading session since April 2025. Chipmakers suffered some of the heaviest losses, with Nvidia shares falling 8.7%, Advanced Micro Devices (AMD) plunging 15.5% and AI cloud computing company CoreWeave losing 12.5%.
The sell-off came just a day after the Dow surged more than 1,500 points following election results, which handed the Democratic Party control to both chambers of Congress. However, investors are now concerned that the election results could slow the expansion of AI data centres across the country.
Several newly elected Democratic officials have called for tighter scrutiny of data centre projects, particularly over their electricity consumption, water usage and impact on local communities. The concerns have added to existing doubts over the billions of dollars technology companies are spending on AI infrastructure without generating comparable returns.
The Nasdaq also entered correction territory after falling more than 10% from its record high in October, reflecting the growing pressure on technology stocks. Meanwhile, Wall Street's closely watched volatility index, known as the VIX, surged as investors sought safer assets amid the market turmoil.
The sharp decline also spread to international markets, with South Korea's Kospi index losing 5.3% as semiconductor stocks came under pressure.