The severe rout was led by semiconductor firms like Nvidia and Qualcomm, the latter of which missed fourth-quarter smartphone chip revenue estimates. Selling extended across the broader technology ecosystem, battering data center operators, neocloud providers, and major power utilities linked to AI infrastructure. Meanwhile, comments from Federal Reserve policymakers Beth Hammack and Thomas Barkin signaled support for gradual rate hikes, leaving traders bracing for another December increase ahead of the October nonfarm payrolls report.
Key points
Midterm election outcomes prompted fears of increased government scrutiny and potential d…: Midterm election outcomes prompted fears of increased government scrutiny and potential delays for AI data center developments.
A divided government in Washington is expected by market analysts to complicate future le…: A divided government in Washington is expected by market analysts to complicate future legislative agreements on fiscal spending.
Traders are preparing for a potential Federal Reserve interest rate hike in December foll…: Traders are preparing for a potential Federal Reserve interest rate hike in December following hawkish comments from central bank officials.
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S&P 500 lost 331.94 points, or 4.32%, to end at 7,353.65 points, while the Nasdaq Composite lost 1,421.50 points, or 5.46%, to 24,315.02. The Dow Jones Industrial Average fell 1,842.69 points, or 3.45%, to 51,513.43.
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The Nasdaq Composite index closed more than 10% below its October 6 record high, marking its biggest daily percentage drop since US President Donald Trump's tariff announcement in April 2025. The S&P 500 also recorded its deepest fall since April 2025. S&P 500, Nasdaq and Dow all notch biggest one-day drops since April 3, 2025. The Russell 2000 fell 127.06 points, or 4.4%, to 2,729.89. The Philadelphia SE Semiconductor Index posted its largest single-day percentage drop since March 2020.
Also Read: Fed's Beth Hammack and Thomas Barkin favour gradual rate hikes as inflation stays high
The selloff followed Democratic victories in Tuesday's midterm elections, including in states where opposition to new data centres has been growing. Investors are increasingly concerned that political resistance and tighter regulations could slow the infrastructure expansion…
Robust domestic earnings and shifting geopolitical dynamics following the US midterms have triggered a strong rally in Indian equity markets. Lower crude oil prices have eased inflation concerns for the import-dependent economy, while strong foreign institutional buying has bolstered market performance despite an international slump in technology shares.
Global portfolio managers are rotating capital into traditional sectors like financial services, consumption, and industrials to escape technology volatility in export-heavy Asian and U.S. markets. This shift is supported by resilient domestic demand, falling oil costs, and lower Treasury yields that strengthen local balance sheets. The massive reallocation could generate historic capital injections if funds fully rebalance their regional benchmarks.
Investor anxiety over potential policy disruptions in Washington quickly cascaded into major East Asian financial hubs, triggering a rapid market-wide retreat. Mounting concerns that American lawmakers might stall critical infrastructure projects directly pressured regional chipmakers and equipment suppliers. As uncertainty mounted, major equity benchmarks in Taipei, Seoul, and Tokyo recorded dramatic declines in rapid succession.