US stocks suffered their sharpest one-day decline in months on Thursday, November 5, according to The Next Web, as investors pulled back from chipmakers, cloud providers, and power companies. The S&P 500 fell 4.4% to close at 7,353.73, and AI stocks led the losses across major indexes.
Key takeaways
- The S&P 500 dropped 4.4% in its biggest single-day loss since April 2025.
- The Nasdaq Composite fell 5.5% to enter correction territory.
- Nvidia shares dropped 9.3%, losing significant ground after a recent peak.
- Voters in multiple states approved restrictions on new data centre projects.
Why are AI stocks dropping after the midterm elections?
The recent midterm elections introduced fresh uncertainty for tech companies that rely heavily on building new data centres and expanding electricity supply. Democrats won control of both chambers of Congress and secured several governorships in states with high concentrations of facilities. Opposition to new projects became a major local campaign issue, with almost 60% of voters in an NBC exit poll calling data centres a major factor in their vote.
Political action followed the ballot box. According to figures from Redbud Consulting, restrictions passed in 44 of the 45 completed data centre referendums across 12 states. Also, 32 of the 34 called gubernatorial races went to candidates supporting tighter rules, with 12 backing outright bans or moratoriums according to Data Center Watch.
How the Nasdaq Composite and major tech firms were hit
The tech-heavy Nasdaq Composite dropped 5.5% to 24,315, pushing the index 11.9% below its October record and into a tech correction. The Nasdaq-100 fell 6.4%, erasing roughly $2.3 trillion in market value. Nvidia dropped 9.3%, while Advanced Micro Devices fell 17.3% and CoreWeave lost 9.8%. Infrastructure suppliers and major tech spenders including Microsoft, Meta, Amazon, and Alphabet also saw declines between 2% and 4%.
What the backlash means for future tech expansion
State-level results have created direct hurdles for future development. In Texas, which holds 27% of planned US capacity according to Wells Fargo, Democrat Gina Hinojosa defeated Governor Greg Abbott after campaigning against projects lacking public input. Ohio voters also approved a ban on large data centres in a county where Meta planned a 65,000-square-metre facility, and newly elected Governor Amy Acton adds a risk of delays. At the federal level, lawmakers have already proposed a nationwide moratorium, leaving investors to weigh whether companies can build the facilities needed to meet demand.
Frequently asked questions
US stocks fell because investors pulled back from chipmakers, cloud providers, and power companies amid growing political and local backlash against data centres.
The S&P 500 fell 4.4% to close at 7,353.73, marking its biggest single-day drop since the April 2025 tariff announcement.
Nvidia dropped 9.3%, Advanced Micro Devices fell 17.3%, and CoreWeave lost 9.8%, while the Nasdaq-100 wiped roughly $2.3 trillion off its market value.
Data centres require large amounts of electricity, land, and water, putting pressure on local power grids and sparking opposition from residents and politicians.
Restrictions were approved in 44 of 45 completed referendums across 12 states, and 32 of 34 winning gubernatorial candidates supported tighter rules or bans.
Based on reporting by The Next Web. Read the original article
