Nasdaq Falls More Than 5 Percent as Tech Stocks Sell Off After U.S. Midterms

The Nasdaq Composite index fell 5.52 percent on November 5, 2026, its worst single-day decline since April 2025, when President Donald Trump announced broad tariffs. The drop erased an estimated $2.5 trillion in market value from the tech-heavy index, according to Dow Jones data. The Nasdaq entered correction territory, closing more than 10 percent below its record high of October 6.

Nvidia shares dropped more than 9 percent, wiping out more than $400 billion in market capitalization and erasing the stock’s gains for the year. AMD and Micron each fell more than 17 percent. Intel declined 10.3 percent. SanDisk plunged more than 22 percent. The Philadelphia Semiconductor Index, which tracks 30 major chip companies, fell more than 12 percent, its worst day in roughly six and a half years.

Shares of Elon Musk’s Tesla and SpaceX also declined sharply, falling nearly 11 percent and 8 percent respectively and removing more than $300 billion in combined market value. Neocloud companies CoreWeave and Nebius dropped roughly 10 percent and 15 percent. Qualcomm fell after issuing a disappointing forecast for the current quarter.

The broader S&P 500 and Dow Jones Industrial Average also posted their worst days since April 2025. The Dow fell more than 1,800 points, or about 3.4 percent. All 11 S&P 500 sectors finished in the red, with technology leading the losses.

Investors attributed the sell-off to Democratic victories in the midterm elections, including gains in states with significant data center investment such as Texas. Several Democratic candidates had campaigned on slowing or regulating AI infrastructure buildout. In Texas, Governor-elect Gina Hinojosa has called for a moratorium on new data center development. Markets had initially rallied the day after the election on relief that results were clear, then reversed as the implications for AI capital expenditure became clearer.

The Nasdaq 100 fell 6.36 percent, its worst day since March 2020. Asian markets opened lower the following session, with major indexes in Japan and South Korea declining at least 6 percent. Samsung and other AI suppliers that trade primarily in Asia faced selling pressure.

The decline marks the latest in a series of pullbacks in AI-related stocks since the Nasdaq’s October record close. Selling has reduced access to financing for some data center participants. Analysts at eToro and Morningstar noted that investors are repricing growth expectations if Democratic majorities lead to tighter regulation or slower permitting for large computing facilities.

The sell-off occurred one day after Democrats secured control of both the House and Senate. While the immediate market reaction focuses on technology, the broader economic implications of divided government and potential shifts in fiscal and regulatory policy remain under assessment by investors.