Stocks Plunge as Election and AI Worries Hit Tech

TL;DR: U.S. stocks fell sharply on Thursday after Democratic midterm wins fed fears of tighter AI regulation and limits on data centers. The S&P 500 dropped 4.4% and the Nasdaq Composite 5.5%, each its worst day since April 2025, according to NBC News and CBS News. Chipmakers took the heaviest losses.

If you hold a public-market portfolio and keep getting pitched private AI deals, Thursday matters twice. It hit the stocks you own, and it changed the mood around the deals you are being offered.

What happened to stocks on Thursday?

The selling was broad, and technology took the worst of it. CBS News reported the Nasdaq Composite closed at 24,315, down 1,422 points, which puts it in a correction, meaning a drop of more than 10% from its October high. NBC News reported that the Nasdaq 100 fell 6.3%, erasing $2.3 trillion in market value.

Index	Thursday move	Reported by
S&P 500	Down 4.4%, to 7,354	CBS News
Nasdaq Composite	Down 5.5%, to 24,315	CBS News
Nasdaq 100	Down 6.3%	NBC News
Dow Jones Industrial Average	Down 1,833 points, or 3.4%	CBS News

The pain was heaviest where the AI trade is most concentrated. The Dow, with less tech weight, fell the least.

Why did the midterms hit AI stocks?

Investors priced in a tougher political climate for AI. The sell-off followed Democratic majorities in both the House and the Senate, according to dpa via Yahoo Finance, which noted that Democrats are generally seen as more sceptical of rapid AI expansion than Republicans. The same report said tech firms could face more opposition to the large data centers that power AI systems.

Data centers are the concrete worry. CNBC reported that local ballot measures in several states would restrict data center construction in different ways. The Boston Globe reported that voters approved most of the data center measures it tracked. Counts differ between the two outlets, so the exact tally is best left to the primary ballot records.

Which stocks fell hardest?

Chips led. CBS News reported that Nvidia fell 9.2% after dropping 3.2% the day before. CNBC reported that Qualcomm and Nvidia each fell more than 9%, with Nvidia losing almost $450 billion in market value.

The damage reached companies one step removed from chips, and it was steep. The Boston Globe reported that Teradyne fell 15%, Entegris 13%, and Analog Devices 11%. It also reported that GE Vernova, up 27% this year on the data center building boom, lost 7%.

The move was global. The BBC reported that Japan's Nikkei closed down 6% and South Korea's Kospi also closed down 6% after a circuit breaker briefly halted trading.

How concentrated is the market in AI?

Very. The Boston Globe reported that the AI-linked tech sector made up about 40% of the S&P 500's total value as of last month, above the 35% level reached during the internet bubble. It also reported that tech companies are forecast to spend $1 trillion this year on data centers and related infrastructure.

That concentration is why a political event moved the whole index. If your index funds are cap-weighted, you own more AI exposure than you may have chosen. The BBC noted that the Nasdaq is still higher than it was a year ago, so Thursday cut into gains rather than erasing them.

What does it mean for private AI holders?

Private holders do not see a daily price. None of the reporting on Thursday says how private valuations will respond, so treat any private mark set before Thursday as unconfirmed until its holder reprices it. Ask when that will happen, and on what basis.

For the mechanics of buying and selling private shares, see how accredited investors access pre-IPO shares. For a look at what rotated into the rest of the market earlier, see non-AI stocks catching the S&P 500 as tech slid.

Common mistakes after a day like this

The first mistake is reading one day as a verdict. A 5.5% fall in the Nasdaq Composite is large, but the same index was still up on the year, per the BBC. A second is treating a stale private mark as current. A third is assuming the political story is settled, when regulation and local data center rules play out over months and the market is only guessing at that path today.

A fourth is checking only the AI names you chose. Index funds and target-date funds carry the same exposure by weight, so look through them too.

FAQ

Why did stocks fall after the midterm elections?

Investors feared tighter AI regulation and more resistance to data center construction after Democrats won majorities in both chambers, according to dpa via Yahoo Finance. Chipmakers and other companies tied to AI spending fell hardest.

Is the Nasdaq in a correction?

Yes. CBS News reported the Nasdaq Composite closed more than 10% below its October all-time high, which is the usual definition of a correction.

Did the sell-off spread beyond the U.S.?

Yes. The BBC reported that Japan's Nikkei and South Korea's Kospi each closed down 6%, and that the UK's FTSE 100 fell nearly 2% and Germany's Dax 2.4%.

Is the Nasdaq still up for the year?

The BBC reported that the Nasdaq is still about 4.6% above where it started this year, and higher than a year ago, even after Thursday's drop.

One thing to do today

Open your brokerage and fund statements and list every holding with AI or data center exposure, including the share of each index fund that sits in the largest tech names. Then note the date of the last valuation on any private position. That list shows how much of your portfolio moved on Thursday and how much has not been repriced yet.

Educational content only. Not investment, tax, or legal advice. Not an offer or solicitation to buy or sell securities. Past performance does not guarantee future results. Private-market investments are illiquid and involve risk of loss, including total loss of capital. Consult qualified advisers. Angel Investors Network is not a broker-dealer or investment adviser.