The Nasdaq Composite fell in one day by the most in 19 months on Thursday as traders fled technology and artificial intelligence-related equities on fears that a Democratic win in the US midterm elections could hamper data centre construction.
The technology-oriented index declined 1,422 points to settle at 24,315, putting the index into correction zone after it slid about 12% from an all-time high in October. Major US stocks shed some $3 trillion in market value in the sell-off, Reuters reported.
The S&P 500 declined 4.36% to 7,353.73. The Dow Jones Industrial Average declined 1,833 points, or 3.44%, to 51,523.06.
Chipmakers were the biggest losers, with Nvidia down more than 9% and the Philadelphia Semiconductor Index down over 12%.
The Democrats’ wide-ranging election success has raised hopes of increased oversight of data centre applications, especially in states where local opposition to their development has increased.
Investors seem to be catching on to the fact that a handful of newly elected members of Congress and governors are trying to put the brakes on the buildout of AI infrastructure, Melissa Brown, global head of investment decision research at Sim Corp, told Reuters.
Markets The sell-off erased the post-election rally from the previous day. Investors rethought their expectations for AI-related spending and technology valuations.
