US technology stocks sold off sharply on Thursday as investors reacted to Democratic victories in the congressional midterms, according to Spiegel. The Nasdaq 100 dropped 6.36 percent to 26,629.81 points, returning the index to its April level. The broader S&P 500 lost 4.36 percent to close at 7,353.73, its steepest single-day decline since April 2025, while the Dow Jones Industrial Average fell 3.44 percent to 51,523.06.
Why it matters
The Democrats secured majorities in both the House and the Senate, Spiegel reports. That outcome puts companies building large AI data centers on notice for tougher scrutiny. Critics of those facilities point to heavy electricity consumption that could push up power prices for households, along with concerns about noise, air pollution and water scarcity. They also question how many permanent jobs the data centers actually create. Democrats are seen as more skeptical of artificial intelligence than Republicans, who have generally favored deregulation.
Chipmakers and storage firms lead the decline
Companies tied to the chip sector, which had been among the biggest beneficiaries of the AI boom, absorbed the heaviest losses. Nvidia shares fell 9.3 percent, according to Spiegel. Storage specialists fared worse: Seagate, Western Digital and Sandisk dropped by as much as 22 percent. Their products are essential to data centers.
Micron lost 17.5 percent. Bloomberg reported, citing unnamed sources, that the chipmaker had paused plans for a memory chip plant in Taiwan amid the threat of a protracted tariff dispute — a decision that raises questions about the future of a key production site for AI components.
The retreat also hit companies in Elon Musk's business empire. Tesla shares fell nearly 11 percent and SpaceX, his space and AI venture, lost 9 percent, Spiegel reports.
Fallout reaches Germany
The turbulence crossed the Atlantic. Infineon, the German chipmaker, shed more than 10 percent. Siemens Energy and Hochtief, both of which had carried high AI expectations, also fell notably, according to Spiegel. Germany's DAX briefly touched a record before closing 0.43 percent lower at 26,325.01 points, while the MDax slipped 0.92 percent to 30,891.56.
The Nasdaq's slide erased 2.3 trillion dollars in market value, though the index had climbed steeply since the start of 2023 on optimism about AI-related business and set a record as recently as October. It is still up 5.5 percent this year, and the Dow has gained 7.2 percent since January.
In Texas, Gina Hinojosa, the Democrat elected governor, has already called for an immediate moratorium on data center construction, Spiegel reports.
Investors will be watching how the incoming Congress translates its regulatory intentions into legislation, and whether data center projects already in the pipeline face delays.
