The Nasdaq falls 5.5% in its worst day since April 2025, and chip stocks lose more than 12%
Tech stocks plunged on 5 November 2026 as investors saw the midterm results threatening the AI data centre build-out. TF reviewed the market reports. The slide followed a relief rally on 4 November, and the causes are still being debated.
What’s Happening & Why It Matters
Stocks Slide After a Relief Rally
The Nasdaq Composite closed down about 5.5%, its worst day since April 2025. The index fell into correction territory, at least 10% below its 6 October record close. The S&P 500 lost 4.4% and ended near 7,354. The Dow Jones Industrial Average dropped 1,833 points, or 3.4%, to 51,523.
Dow Jones data put the Nasdaq’s lost value at about $2.5 trillion (about €2.2 trillion). The Philadelphia Semiconductor Index fell more than 12%. The “Magnificent Seven” tech firms lost about $1 trillion (about €890 billion) in a day, according to the same reports.
Why Data Centre Politics Spooked Investors
Democrats won the midterms, and many campaigned on slowing AI and data centre growth. Rising electricity bills turned data centres into a local political issue. Texas governor-elect Gina Hinojosa pledged a moratorium on new construction, and Senator Bernie Sanders called for a national pause.
Voters backed restrictions in most of 45 data centre ballot measures, with 39 passing, per Data Centres on the Ballot. UBS estimates pauses could put about 30% of planned US capacity additions in 2028 at risk. Investors fear heavy AI spending may not pay off, a worry TF covered in its Alphabet and Microsoft story.
Chips, Data Centre Firms and Musk Stocks Fall Hardest
Nvidia (@nvidia) dropped 9.3% to $181.60, shedding over $400 billion (about €356 billion). AMD and Micron each fell more than 17%, Intel 10.3% and SanDisk over 22%. Data centre operators IREN, Applied Digital and Nebius each lost more than 14%.
Meta lost 4%, Alphabet 2.2% and Amazon 2.2%. Tesla fell 10.8%, and SpaceX fell between 8% and 9%, and together they lost over $300 billion. Analyst Dan Ives said the political change makes a SpaceX and Tesla merger harder in 2027. Elon Musk spent close to half a billion dollars in the midterms, and most of his candidates lost.
Global Markets Follow Wall Street
Japan’s Nikkei fell 6% at the open, and South Korea’s Kospi dropped over 8.5%, triggering a circuit breaker. Taiwan’s Taiex fell more than 8.3%, with TSMC down 8.5%. In Europe, Infineon fell over 8.5%, and ASML fell 6.5%.
Analysts say the selloff could continue into Friday, starting in Asia. President Trump blamed Democrats for the fall. Nobody can say whether the drop will last.
My take: Markets priced in a policy risk, and the move was larger than any single bill justifies. A pause on new data centres would slow Nvidia’s customers more than its engineers. The fall hides a simpler fear: AI spending needs earnings to match.
TF Summary: What’s Next
Investors will watch Asian markets on Friday for signs of calm. State legislatures will test moratorium bills in 2027 sessions. Chip firms and hyperscalers will defend their spending plans.
MY FORECAST: The Nasdaq will stay below its 6 October record through November. At least one US state will advance a data centre pause bill by the end of 2026. Big tech firms will defend capital spending in public.
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RELATED KEYPHRASE 1: Nasdaq correction
RELATED KEYPHRASE 2: Nvidia shares fall
RELATED KEYPHRASE 3: data centre moratorium
RELATED KEYPHRASE 4: midterm elections AI