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AI stocks plunge after election, driving down US markets
US markets fell sharply on Thursday as investors reassessed the prospects for AI and technology companies after Democrats won sweeping midterm victories. The sell-off followed a rally the previous day, when election results and President Donald Trump’s acceptance of them had eased concerns about political uncertainty.
The Nasdaq dropped 4.8 per cent in midday trading, the S&P 500 fell 3.6 per cent and the Dow Jones lost 2.8 per cent. Voters backed 39 of 45 ballot measures seeking restrictions on AI infrastructure; UBS estimated pauses could put about 30 per cent of planned US data centre capacity additions in 2028 at risk. Nvidia shares fell 8.2 per cent, while CoreWeave lost more than 12 per cent; gold rose just over 1 per cent to $4,115 an ounce.
In short
- US shares slid as AI and chip stocks led the decline.
- Voters backed 39 measures restricting AI infrastructure.
- Gold rose as investors reassessed risks.
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
The sell-off may reflect a reasonable reassessment of the risks facing AI firms: voters backed many measures restricting AI infrastructure, and proposed pauses could put a substantial share of planned data-centre capacity at risk. Investors may therefore be factoring in slower expansion, greater regulatory uncertainty and weaker expected returns, while the rise in gold suggests some sought safer assets.
The case against
The market reaction may be an overcorrection: ballot measures do not necessarily become binding restrictions, and even enacted pauses could be limited in scope or timing. A sharp fall after the previous day’s rally may also reflect shifting sentiment and uncertainty rather than a lasting change in demand or the long-term prospects of AI companies.
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