A deepening AI stock selloff hit Wall Street on Thursday, 5 November 2026, wiping out the previous day’s post-election rally. Investors are worried that Democratic wins in the US midterms could slow the construction of AI data centers. The S&P 500 fell more than 3% in afternoon trading, and the Nasdaq Composite dropped about 4.7%, leaving it more than 10% below last month’s record.
All figures below are intraday and may change by the close of trading.
What Happened on Wall Street
The reversal was sharp. On Wednesday, the S&P 500 rose 119.70 points to 7,688.62. The Dow Jones Industrial Average gained 1,569.40 points to 53,356.12, and the Nasdaq added 364.50 points to 25,736.51. It was the S&P 500’s best day in three months.
On Thursday, the selling started at the open and accelerated through the morning. By the afternoon, the S&P 500 was down about 3.2%, putting it on course for its worst session since April 2025, when tariff announcements rattled markets. The Nasdaq lost roughly 1,200 points, and the Dow shed more than 1,100 points.
Chip and data-center names took the heaviest losses:
Nvidia fell about 8%, following a 3.2% drop on Wednesday.
Advanced Micro Devices dropped roughly 16%.
Micron Technology fell more than 12%.
CoreWeave, which rents out AI computing power, sank about 15%.
GE Vernova, which helps supply power to data centers, lost about 9%.
Markets abroad felt the pressure. South Korea’s Kospi tumbled 5.3% and Japan’s Nikkei 225 fell 1.8% in the morning, as technology and AI-linked shares sold off.
Why the AI Stock Selloff Is Accelerating
The immediate trigger is political. Democrats won decisively in the November 3 midterms. In Texas, Democrat Gina Hinojosa defeated Republican Governor Greg Abbott after campaigning for a temporary pause on new data-center development until lawmakers put stronger protections in place.
Investors fear that governments could now force delays. That would mean fewer purchases of AI chips, and less demand for electricity and related equipment. UBS strategists estimated that project delays could affect around 30% of expected data-center capacity additions in 2028.
The worry did not appear overnight. AI stocks have swung for months on concerns that the data-center build-out may slow because borrowing has become so expensive, the Associated Press reported. The election added a political risk on top of a financing risk.
A Case for Caution on the Moratorium Fears
Some analysts urge perspective. Reuters quoted analysts who said broad moratoriums may not materialize. A more likely outcome, they argued, is tighter regulation and closer oversight of data centers.
Others expect Democratic control of Congress to bring more hearings and investigations into the AI build-out. Still, analysts doubt that a bill significantly blocking data-center expansion would become law.
Nigel Green of the deVere Group also cautioned against reading the selloff as proof that AI demand is disappearing. He said companies with stronger balance sheets and established earnings could prove more resilient.
Key Details: Earnings Offer Little Cushion
Strong results have not protected the sector. AMD reported a record quarter this week, and chief executive Lisa Su described it as the company’s largest and most profitable ever. The shares still fell sharply on Thursday, a sign that political risk is currently outweighing earnings.
Optical-networking suppliers also slumped. According to 24/7 Wall St., Applied Optoelectronics fell 16%, Coherent dropped 14% and Lumentum sank 13%. Data-center builders and power-equipment makers had already taken heavy losses on Wednesday, with some falling by 20% or more.
Not everything fell. Roughly two in five S&P 500 stocks rose on Thursday. AppLovin and Tapestry climbed after strong profit reports, but those gains were drowned out by the size of the AI losses.
Broader Context: Why Nvidia Moves the Whole Market
The weight of AI stocks explains the scale of the damage. Nvidia is the second-largest company in the S&P 500 by total value. A 1% move in its shares has more effect on the index than a similar move in almost any other US stock.
Bond markets offered little relief. The yield on the 10-year Treasury eased to about 4.86% from 4.95% on election night. It had topped 5.30% last month. Brent crude rose roughly 2.5% to near $97 a barrel as uncertainty over the Iran war persisted.
Longer term, share prices tend to follow corporate profits and interest rates more closely than they follow election results, the AP noted.
What Happens Next
Investors will watch three things. First, the final closing figures, which will show whether Thursday’s losses held. Second, how newly elected officials in Texas and other states move on data-center rules. Third, whether the largest cloud companies keep or trim their spending plans.
Until those questions are answered, volatility in AI-linked shares is likely to stay high.
