Source : Reuters | AI-generated illustration
NEW YORK, November 5, 2026 — The Nasdaq Composite closed sharply lower on Thursday, recording its biggest one-day drop in 19 months and confirming a technical correction, as chipmakers and data-centre stocks sank on fears of tougher artificial intelligence regulation after Democrats won control of the United States Congress.
Reuters said the tech-heavy index’s slide came as investors weighed the implications of Tuesday’s midterm results for AI infrastructure buildout. Chipmakers that supply components for data centres were among the steepest decliners, with Nvidia falling more than 9 percent and the Philadelphia Semiconductor Index plunging more than 12 percent, according to market reports.
The Nasdaq ended more than 10 percent below its October 6 record close, meeting the common definition of a correction. Coverage from Yahoo Finance, CNBC, the BBC and Investing.com put the day’s drop near 5.5 percent, with the index closing around 24,315. The S&P 500 also suffered one of its worst sessions since April 2025 as the sell-off erased trillions of dollars in market value.
Democratic gains in states with large planned data-centre projects, including Texas, Ohio and Georgia, and dozens of local ballot measures restricting new facilities, fuelled concern that political pressure could slow the infrastructure boom that has driven AI-related equities this year. Texas governor-elect Gina Hinojosa campaigned against rapid data-centre expansion.
“Investors appear to be recognising that some newly elected members of Congress and governors are looking to slow the pace of AI infrastructure development,” Melissa Brown, global head of investment decision research at SimCorp, told Reuters. She said a full stop was unlikely, but any slowdown would unsettle a growth story built on rapid buildout.
Other large technology names also fell after Wednesday’s rebound. Meta Platforms slid about 4 percent, while Amazon and Alphabet each dropped about 2.2 percent in reports cited by financial wires. Data-centre operators including IREN and Applied Digital fell more than 14 percent in some accounts, and CoreWeave dropped nearly 10 percent.
Weak guidance from Qualcomm and other earnings-related pressure added to the session’s losses. Memory and semiconductor equipment shares were hit in Asia as the sell-off spilled into South Korea and Taiwan. Analysts said the market was shifting from relief that the midterms had clarified political control to anxiety about what Democratic majorities might mean for AI capital spending and regulation.
Thursday’s move followed a volatile week in which AI-linked stocks had already begun to reprice on concerns about debt-funded expansion and rising financing costs. The Nasdaq’s confirmation of a correction marked a sharp turn from the record highs reached in early October.
Source: Reuters on X, with background from Yahoo Finance/Reuters market copy, CNBC, BBC and Investing.com.
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