Overview
- Markets reversed quickly after the midterms, with US indexes plunging on Thursday when the Nasdaq fell about 5.5 percent, the S&P 500 about 4.4 percent and the Dow roughly 3–3.4 percent.
- The Philadelphia Semiconductor Sector Index lost more than 12 percent and many chip and memory stocks fell by double digits, wiping out trillions in market value in a single session.
- Investor concern focused on political risk from calls by figures including Bernie Sanders and state officials for moratoria or tighter permits on new data centres, which would delay the large, power‑and‑water‑intensive projects that underpin AI scaling.
- The rout spread to Asia and Europe, forcing a 20‑minute trading halt in Seoul, sending the Kospi and Nikkei sharply lower and erasing recent gains in Germany’s DAX after it hit a record high earlier in the week.
- Analysts say this is a timing and profitability reset for AI infrastructure rather than proof the technology has failed and advise watching company guidance, any concrete regulatory moves or moratoria, and upcoming US economic data for the next market signals.