Global technology stocks suffered a massive sell-off following the Democratic Party’s sweeping victory in the US midterm elections, triggering fears of heightened regulatory scrutiny over artificial intelligence (AI) and data centre expansion.
The market turmoil wiped out trillions of dollars in market value across Wall Street and Asian trading floors.
On Thursday, Wall Street recorded its steepest single-day decline since April 2025. The tech-heavy Nasdaq Composite plunged 5.5%, while the S&P 500 Index dropped 4.4% and the Nasdaq 100 slid 6.4%.
The sell-off spread to Asian markets on Friday, hitting major chipmakers in Japan, South Korea, and Taiwan. South Korea’s Kospi plummeted 7.4%, while Japan’s Nikkei 225 dropped 5.7%.
The downturn stems from growing investor apprehension that newly elected Democratic officials will impose curbs on AI infrastructure. Leaders like Texas Governor-elect Gina Hinojosa and South Carolina Senator-elect Annie Andrews campaigned heavily against unchecked data centre construction.
Industry data indicates that roughly 40% of planned US data centre capacity falls within states with incoming Democratic leadership advocating pauses on buildouts.
Semiconductor giants bore the brunt of the sell-off. Nvidia shares tumbled over 9%, erasing $400 billion in market value, while AMD, Micron, Intel, and ASML also fell sharply.
