TLDR
- The Nasdaq Composite fell 5.5% on Thursday, its biggest one-day drop since April 2025.
- Democrats won big in the midterms after many campaigned against data centers.
- Sen. Bernie Sanders called for a national data center moratorium.
- Chip, cloud and data center stocks fell sharply, and CoreWeave credit spreads hit a record.
- UBS said about 30% of expected 2028 US data center additions could face pauses.
The Nasdaq Composite fell 5.5% on Thursday, its biggest one-day drop since April 2025. Investors sold technology shares after Democrats won big in the US midterm elections.
The Nasdaq 100 dropped 6.4%, which erased $2.5 trillion in market value. The Nasdaq Composite is now in correction territory, down nearly 12% from its record close on October 6.
Democrats Target Data Centers
Many Democrats ran against data centers during the campaign. In the CNBC Voter Poll, 56% of voters said AI and data centers were a crucial or major factor in their vote. Of those voters, 65% backed a Democratic candidate for Congress.
Sen. Bernie Sanders wrote on X, “National data center moratorium now.” He pointed to local votes where residents approved limits on data centers.
7 months ago, AOC and I introduced an AI data center moratorium.
Last night, 43 of 44 communities voted for one locally.
Americans don’t want Big Tech oligarchs wrecking the environment, gutting jobs and threatening humanity’s future.
NATIONAL DATA CENTER MORATORIUM NOW
— Sen. Bernie Sanders (@SenSanders) November 4, 2026
Rep. Yassamin Ansari wrote that pausing AI development should be a top priority for the House majority on Day 1. Rep. Greg Casar, who chairs the Congressional Progressive Caucus, replied “Yes!”
In South Carolina, Annie Andrews flipped a Senate seat after her campaign website branded her opponent “data center Darline.” Ohio’s Sherrod Brown, who defeated Sen. Jon Husted, said in his victory speech, “I do not work for data centers.”
Pennsylvania Gov. Josh Shapiro signed an executive order in August to slow data center development. He said local communities should get the final say.
Texas holds 27% of planned data center capacity, according to Wells Fargo. Democrat Gina Hinojosa defeated Gov. Greg Abbott. In October she said she would issue a moratorium on all data center approvals until lawmakers pass protections for Texans.
Chip and Cloud Stocks Take the Hit
The Philadelphia SE Semiconductor index fell 12% to its lowest level in more than six months. Nvidia dropped 9% and Advanced Micro Devices fell 17%.
CoreWeave slid 10%, and Nebius dropped 15%. Both companies have lost half or more of their value since October 6.
CoreWeave’s five-year credit default swap spreads widened to a record 1,267.9 basis points, according to S&P Global Market Intelligence. Intel’s spreads also hit a record at 149.7 basis points.
Data center operators Applied Digital, Cipher Digital and IREN each fell more than 14%. GE Vernova lost 7.4% and Constellation Energy slipped 2.5%.
Amazon and Alphabet each slid 2.2%. Microsoft declined 3.6%, and Bloomberg News reported it is tightening oversight of some data center projects from Nebius, IREN and Nscale.
UBS analysts estimated that around 30% of expected US data center capacity additions in 2028 could be at risk from construction pauses. The VIX, Wall Street’s fear gauge, posted its largest increase since December 2024.
Japan’s Nikkei and South Korea’s Kospi, both up more than 20% this year, fell after Wednesday’s data center rout. Some analysts said the selloff could affect the timing of Anthropic’s expected fall IPO.
Thursday was the second straight day of selling in AI stocks and the fifth Nasdaq Composite drop of more than 500 points since mid-October. Many analysts expect more selling, likely starting with Friday’s sessions in Asia.
