Key facts
- The Nasdaq 100 was down 5.82% at 26,782.21 and 13% below its latest high, entering a correction.
- The iShares Semiconductor ETF was down 10%, on track for its worst day in six years, per the report.
- Sandisk fell 19% and Micron 15%; Nvidia was down 8% and Broadcom 9%.
- Jefferies called a Democratic sweep the worst-case near-term scenario for the AI trade and cut its data center capacity outlook.
- Data center construction spending rose 80% in September while most other construction categories declined, per Jason Furman's analysis.
- Meta is building a $50 billion data center in Louisiana and a $14 billion site in Texas, the report said.
US stocks were trading sharply lower shortly after 2:30 PM ET on Thursday, November 5, 2026, as investors cut exposure to companies tied to artificial intelligence infrastructure, Business Insider reported. The S&P 500 was down 4.07% at 7,376.02, the Dow Jones Industrial Average was down 3.20%, or 1,707.74 points, at 51,648.38, and the Nasdaq 100 was down 5.82% at 26,782.21. The report described the session as the indexes' worst trading day since the 2025 stock selloff that followed Liberation Day, and said the moves were intraday readings rather than closing levels.
The report tied the selling to concern that new Democratic officeholders at the state and federal level will tighten rules on data center construction, slowing AI capital spending. The Nasdaq 100 was 13% below its latest high and in a correction, according to the report, and fell below its 200-day moving average during the session.
The steepest moves were in companies selling memory chips, semiconductors, data center equipment and cloud computing capacity. The iShares Semiconductor ETF was down 10%, on track for its worst day in six years, the report said. Among individual stocks, Sandisk was down 19%, Nebius and IREN 16% each, Micron 15%, Vertiv 14%, Tesla and CoreWeave 11% each, Nvidia 8%, and Meta 4%. The report said the decline erased gains from Wednesday's session, dated November 4, 2026, when the benchmarks had their best day since April 2025.
Analysts at Jefferies called a Democratic sweep the "Worst-Case Near-Term Scenario" for the trade, citing the potential for tighter data center regulation, and cut its outlook for data center capacity through the end of the decade, according to the report. Nick Puckrin, described as a cross-asset analyst, wrote in a note: "There's blood on the streets today as AI-linked names tumble."
Meta President Dina Powell McCormick said at the Wall Street Journal Tech conference in California on Wednesday that starting new data center build-outs in the United States would be "very challenging." The report noted Meta is building a $50 billion data center in Louisiana and a $14 billion site in Texas.
The report cited Harvard economist Jason Furman's analysis that data center construction was one of the few areas of construction spending that grew in September, rising 80% while most other sectors declined. Mohamed El-Erian, described as a top economist, and David Rosenberg also commented on whether the economy can offset slower tech spending, according to the report.