NEW YORK/WASHINGTON: Shares in Elon Musk's SpaceX have plunged as tech and artificial intelligence (AI) stocks more broadly plummeted a day after the Democrats swept to victory in the US midterms. Democrats won in some key data centre states including Texas, and the market has been reacting to possible tougher scrutiny of data centre construction and the AI industry.
SpaceX shares were down more than 8 percent in early trading, while Tesla shares dropped more than 9 percent, BBC reported. Shares in chipmakers Qualcomm and Intel were down nearly 11 percent and more than 7 percent, respectively.
Nvidia shares have also dropped by more than 7 percent. Those losses dragged the tech-heavy Nasdaq stock index down, and it has fallen 4.8 percent in early trading.
Meanwhile, stock markets diverged Thursday as traders weighed Donald Trump's hefty defeat against lingering concerns about huge AI investments. Frankfurt's DAX index hit a record high and London headed close to a new all-time peak after the Democrats' stunning victory over Trump's Republicans spurred investor optimism.
But tech-heavy Asian stock markets slid overall, with Seoul, the poster child of the AI-led surge in the first half of 2026, shedding more than five percent. Wall Street opened mixed, with the broad S&P and tech-heavy Nasdaq sliding following strong gains on Wednesday.
Oil prices recovered after plunging as much as 10 percent on Wednesday on hopes of progress towards ending the US-Iran war in case of increased Democratic pressure for a diplomatic solution. "A release valve has been unscrewed following the Democratic success of the midterms, with pent-up concerns about an escalation of the war in the Middle East evaporating," said Susannah Streeter, chief investment strategist at Wealth Club.
"But sentiment around the AI trade remains fragile, with an expected slowdown in the data centre build-out still acting like a drag on the big tech sector players." The Philadelphia Semiconductor Index, which includes the global heavyweights in the AI-related industry, fell around five percent as trading began.
In Britain, the pound was little changed after the Bank of England raised its benchmark interest rate, as expected, for the first time in more than three years as inflation remains elevated. As election results keep coming from races around the country, a few more House seats have just gone to Democrats.
Democrat Shannon L Taylor flipped a seat in Virginia and so did Democrat Sam Forstag in Montana, while Democrat Don Davis held his party's seat in North Carolina. That brings Democrats' total seats in the House to 247, compared to Republicans' 153 seats, with 35 seats still undecided.
The Nasdaq Composite tumbled on Thursday, on track for its deepest one-day drop in 19 months and set to confirm it was in a correction, as chipmakers sank on fears of tougher AI regulation after Democrats won control of the US Congress. Nasdaq 100 set to erase more than $2.5 trillion in market value.
The sharp declines put the Nasdaq Composite on track for its biggest daily drop since President Donald Trump's "Liberation Day" tariff announcement in April 2025.