Overview
- Democrats won control of Congress in the midterm elections, a result that first helped push markets higher and then, by Thursday, helped spark a rapid reversal as investors reassessed policy risks.
- The two‑day swing erased roughly $2.3 trillion to $3 trillion in market value and pushed the Nasdaq into correction territory after a one‑day drop of about 5.5%.
- Shares tied to AI, data centers and semiconductors led the losses as traders worried the new political map would slow new builds, tighten tax or permitting rules and increase oversight of big tech.
- Heavy use of leverage magnified the rout because hedge funds and other borrowers faced margin calls that forced additional selling and deepened price declines.
- The weakness spread to Asian chip markets and created big paper losses for founders and investors, and market participants are now watching upcoming CPI, jobs numbers and key tech earnings for signs the sell‑off will stop or resume.