Investors reversed the previous day's sharp rally amid mounting concerns over data centre expansion and sector-specific spending. Democratic victories in gubernatorial races, continued Senate control, and local ballot measures rejecting new data centres stoked fears of forthcoming regulatory hurdles. The resulting broad-based tech sell-off also crossed the Atlantic, erasing earlier European gains and pulling Britain's FTSE 100 down by 0.4% to close at 10,782.66.
Key points
The tech-heavy index fell up to 5%, marking its sharpest single-day decline since April 2…: The tech-heavy index fell up to 5%, marking its sharpest single-day decline since April 2025.
Local ballot measures rejecting data centres and Democratic Senate control heightened exp…: Local ballot measures rejecting data centres and Democratic Senate control heightened expectations of sector headwinds.
Weakness across American exchanges rapidly spread to international markets, ultimately pu…: Weakness across American exchanges rapidly spread to international markets, ultimately pushing European bourses into negative territory.
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The tech-heavy US Nasdaq share index is on track for its worst day in 18 months after slumping by up to 5% on Thursday amid growing signs that the artificial intelligence industry will face tougher regulation after this week’s midterm elections.
As Wall Street sustained widespread losses, the Nasdaq composite tumbled into ‘correction territory’ – more than 10% below its recent record high. The index was heading for its biggest one-day fall since Donald Trump announced his ‘liberation day’ tariffs on US trading partners in April 2025.
Worries over massive AI spending gripped the New York stock market and rippled out to other bourses worldwide as investors anticipated tougher scrutiny of datacentre expansion plans.
Chip stocks led the slump, with memory maker SanDisk tumbling by 19% and hard drive maker Western Digital falling by 16.5%.
Wall Street’s ‘fear index’, the VIX, jumped by 40% to its highest levels since the early weeks of the Iran war, in a sign of rising market volatility.
Analysts pointed to expectations that Democratic governors will clamp down on the rollout of new datacentres after…
Democratic midterm election victories triggered fresh political uncertainty around artificial intelligence infrastructure expansion, leaving the Nasdaq 100 facing more than $2 trillion in market-value losses. Heightened regulatory concerns compounded existing market anxieties regarding elevated interest rates and questionable returns on heavy capital spending. Consequently, the rout battered hardware manufacturers, specialized cloud providers, and utility operators tied to power-intensive server facilities.
Investors tracking the semiconductor sector are closely monitoring the current downward trajectory of the chipmaker's shares. A sustained retreat from recent highs threatens to push the valuation into bear market territory. Market participants must assess whether this decline represents an entry point or further exposure to risk.
Investors are facing renewed market turbulence as tech-driven momentum shows signs of faltering. A sharp spike in the primary volatility index reflects mounting unease across trading desks, driven primarily by setbacks in the artificial intelligence sector. This sudden repricing of risk marks a significant turning point after an extended period of relative calm.