Investing.com — U.S. President Donald Trump blamed Democrats for Wall Street’s sharp selloff following their sweeping midterm election victories, saying the stock market had suffered one of its worst days in history and warning that Americans’ 401(k) retirement accounts had taken a hit.
Democrats won control of both the House of Representatives and Senate in Tuesday’s November 3 elections, flipping at least seven Senate seats and more than two dozen House districts in a major setback for Republicans.
The results also included Democratic victories in key gubernatorial races and widespread support for local measures restricting data-centre developments.
Wall Street initially welcomed the outcome. On Wednesday, the Dow Jones Industrial Average surged 1,569 points, or 3%, while the S&P 500 gained 1.6% and the Nasdaq Composite advanced 1.4%, as investors anticipated reduced political uncertainty.
However, that rally reversed sharply on Thursday as investors reassessed the implications of Democratic victories for the artificial intelligence industry.
The S&P 500 dropped 4.4% to 7,353.73, its steepest decline 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%.
The losses were concentrated in technology and semiconductor stocks amid concerns that Democratic lawmakers and newly elected governors could introduce tighter restrictions on data-centre construction, potentially slowing the expansion of AI infrastructure.
At least 38 jurisdictions passed restrictions or bans on data-centre projects, while Texas’ incoming Democratic Governor Gina Hinojosa has advocated a moratorium on new developments.
Nvidia fell around 9%, Advanced Micro Devices dropped 17% and Micron declined more than 17%.
The Nasdaq’s market capitalisation shed about $2 trillion during Thursday’s selloff, according to Reuters, as investors reassessed the growth outlook for AI infrastructure.
While the Dow’s decline marked its worst second trading session following a midterm election in records dating back to 1896, Thursday’s broader market losses were not unprecedented. The S&P 500’s 4.4% decline was its largest since April 2025.
Original Article
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