Investing.com — U.S. President Donald Trump blamed Democrats for Wall Street’s sharp decline following their blowout victories in the midterm elections, saying the stock market had one of the worst days in history and warning that Americans’ 401(k) retirement accounts had taken a hit.
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Democrats took control of the House and Senate in the Nov. 3 election, flipping at least seven Senate seats and more than two dozen congressional districts in a major setback for Republicans.
The results also include Democratic victories in key gubernatorial races and broad support for local measures restricting data center development.
Wall Street initially welcomed the result. On Wednesday, the Dow Jones Industrial Average jumped 1,569 points, or 3%, while the S&P 500 gained 1.6% and the Nasdaq Composite rose 1.4%, as investors anticipated a reduction in political uncertainty.
However, that trend reversed sharply on Thursday as investors reassessed the implications of Democratic victories for the artificial intelligence sector.
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The S&P 500 fell 4.4% to 7,353.73, its biggest drop since the April 2025 tariff selloff. The Dow lost 1,833 points, or 3.4%, while the Nasdaq plunged 5.5%, its worst session in 18 months. The Russell 2000 also fell 4.4%.
Losses were concentrated in technology and semiconductor stocks, amid concerns that Democratic lawmakers and newly elected governors could introduce tighter restrictions on data center construction, potentially slowing the expansion of AI infrastructure.
At least 38 jurisdictions have passed restrictions or bans on data center projects, while Texas’ new Democratic governor, Gina Hinojosa, has advocated a moratorium on new developments.
Nvidia fell about 9%, Advanced Micro Devices fell 17%, and Micron fell more than 17%.
The Nasdaq’s market capitalization lost about $2 trillion during Thursday’s selloff, according to Reuters, as investors reassessed the growth prospects of AI infrastructure.
While the Dow’s decline marked its worst second trading session after the midterm elections, in records dating back to 1896, Thursday’s broader market losses were not unprecedented. The 4.4% decline in the S&P 500 is the largest since April 2025.
Original article
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