Wall Street turned on the artificial intelligence trade on Thursday, handing the Nasdaq its worst day in 19 months and pushing the index into a correction. Nvidia, the company at the centre of the AI boom, fell more than 9 percent, while the Philadelphia semiconductor index plunged more than 12 percent. About $3 trillion in market value evaporated from S&P 500 companies in a single session, as investors priced in a new fear: that the midterm elections will slow the data centre buildout the entire boom depends on.
## A rout led by chips
The Nasdaq Composite fell 5.52 percent to close at 24,315 points, its biggest one-day drop since April 2025, and confirmed a technical correction by ending more than 10 percent below its record close of October 6. The S&P 500 dropped 4.36 percent to 7,353.73, while the Dow Jones Industrial Average fell 3.44 percent to 51,523.06.
Nvidia closed at $181.60, down 9.26 percent from its previous close of $200.13, its worst session since April and its first close below $200 since July 30. At its lows, roughly $381 billion of the company’s market value was at stake, per Dow Jones Market Data. Volume was heavy, with 26.9 billion shares traded against a 17.7 billion average.
The damage spread well beyond Nvidia. Data centre owners were hit hardest: IREN and Applied Digital each fell more than 14 percent, and CoreWeave dropped almost 10 percent. Meta slid 4 percent, Amazon and Alphabet each lost 2.2 percent, and Qualcomm fell 9.5 percent after missing estimates for smartphone chip sales.
## Why investors turned on the buildout
The trigger was politics. Democrats won control of both houses of Congress in Tuesday’s midterm elections, and investors now expect tougher scrutiny of the power-hungry data centres behind the AI boom. Of 41 data centre ballot measures decided this week, all but one went against the server farms. [Local opposition to data centres](https://geroundtable.com/voters-data-centers-biggest-fight/) has become a national political force.
Analysts warned that construction pauses could put about 30 percent of data centre capacity additions in 2028 at risk. The turn was sharp: on Wednesday the S&P 500 had posted its biggest gain in three months. By Thursday that [election result](https://geroundtable.com/ai-millions-couldnt-buy-congress/) looked like a threat to the buildout, and one portfolio manager called it the capitulation phase for the sector.
## Our read
This was not a verdict on the technology. No customer cancelled an order, and nothing about Nvidia’s chips changed. What changed was the price of the buildout itself: the power, the permits and the politics. Investors have spent a year rewarding the biggest spenders; on Thursday they asked, at this scale, whether the returns will arrive before the bills do.
The comparison that matters is April 2025, when tariff fears produced the last drop of this size. The cause is different this time — regulation and demand, not trade — but the pattern is the same: a market that had priced in uninterrupted growth suddenly repricing risk.
Nvidia reports results on November 17, and that call is now the next test of whether the AI spending story still holds. Microsoft has shown one form of discipline, [walking away from extra capacity at Nscale’s Texas site](https://geroundtable.com/microsoft-walks-away-nscale-texas-deal/). The S&P 500 remains up 7.4 percent this year and the Nasdaq 4.6 percent, so this is a correction, not a collapse.
## Why It Matters
For anyone following AI, the buildout is no longer an engineering story; it is a political one, and its pace moves markets. OpenAI’s response points the way: its [community compact](https://geroundtable.com/openai-community-compact-data-centers/) promises campuses will pay their power and infrastructure costs. Expect every lab and chipmaker to face the same question: who pays for the power, and how fast can you build?
## Background
The warning signs were already there. On October 30, Apple [retook the title of the world’s most valuable company from Nvidia](https://geroundtable.com/apple-retakes-most-valuable-crown-nvidia/) as both stocks fell, with Nvidia down 4.2 percent on the day. Investors had spent the autumn questioning whether heavy AI spending would pay off, and Thursday turned that doubt into the year’s sharpest selloff.
Source: [Reuters report on the rout](https://srnnews.com/sp-500-futures-steady-after-midterm-rally-nasdaq-lags-on-chip-weakness/) and [Al Jazeera on the plunge](https://www.aljazeera.com/economy/2026/11/5/ai-stocks-plunge-after-election-driving-down-us-markets)
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