Key facts
- The Nasdaq Composite was on track for its biggest one-day fall since Trump announced 'liberation day' tariffs in April 2025.
- Nvidia was the top faller on the Dow Jones industrial average, down 6.7%, followed by Goldman Sachs, down 5.7%.
- Analysts pointed to expectations that Democratic governors will clamp down on datacentre rollout after gubernatorial wins.
- Saxo UK strategist Neil Wilson said a 'complete capitulation level event' was playing out in tech stocks on Thursday.
- Tech analyst Dan Ives said Democrats taking control, especially the Senate, will create hurdles for AI and tech legislation.
The Nasdaq Composite was on track on Thursday, November 5, 2026, for its worst day in 18 months, falling by as much as 5% as investors anticipated tougher scrutiny of datacentre expansion plans following this week's midterm elections. The index dropped into correction territory, more than 10% below its recent record high, and was heading for its biggest one-day fall since Donald Trump announced his 'liberation day' tariffs on US trading partners in April 2025.
Chip stocks led the decline, with memory maker SanDisk down 19% and hard drive maker Western Digital down 16.5%. The VIX, Wall Street's 'fear index', rose 40% to its highest levels since the early weeks of the Iran war. The Dow Jones industrial average was down more than 1,000 points, or 2%, at 52,264 points in late morning trading, with Nvidia the top faller, down 6.7%, followed by Goldman Sachs, down 5.7%.
Analysts pointed to expectations that Democratic governors will clamp down on the rollout of new datacentres after the party won a series of gubernatorial races this week, and US voters rejected datacentres in local ballots across the country. Neil Wilson, investor strategist at Saxo UK, said a 'complete capitulation level event' was playing out in tech stocks on Thursday, adding: 'The fear is a total momentum unwind as Democrats pace the frontier and kibosh datacentre buildout ... this looks totally overdone but the nature of sell everything in this market means we need to look for some stability first.'
The sell-off reversed Wednesday's rally, when Wall Street stocks had their biggest daily gain in months as investors anticipated that Democratic success in the midterms could restrain the White House. Tech analyst Dan Ives warned that the results are a clear sign the pace of datacentre buildout will start to slow down, saying: 'There is no way to sugarcoat that Democrats taking control, especially over the Senate, will create some major hurdles for AI and tech legislation in the Beltway over the next two years.'
In Europe, an early stock market rally had fizzled out by late trading, with Britain's FTSE 100 closing down 46 points, or 0.4%, at 10782.66.