Stocks plummeted Thursday, as a blue wave of victories by anti-AI candidates from Maine to Alaska added to already growing fears about the durability of the artificial intelligence boom.

The tech-focused Nasdaq 100 index dropped 6.3%, erasing $2.3 trillion in market value, as investors stepped back to evaluate new risks to the billions of dollars in investments that have poured into the AI sector.

The S&P 500 plunged 4.4%, erasing $2.8 trillion from the index’s value. Both indexes suffered their worst day since April 2025, when President Donald Trump’s global tariffs rocked markets.

The broader Nasdaq Composite, which tracks more than just tech stocks, fell more than 5.5% and tumbled into “correction” territory, which is when a stock or index declines at least 10%.

Markets had largely expected Democrats to win majorities in Congress. But they did not anticipate the scale of the victories, or the upset wins of candidates like Gov.-elect Gina Hinojosa in Texas, the largest data center market in the country.

Democrats still hope to clinch Senate seats in Mississippi and Alaska. But already, hundreds of candidates who pledged to rein in AI data centers have been elected to office, raising the prospect of increased regulation on an industry that is the primary driver of U.S. economic growth.

Trump weighed in Thursday to blame the plummeting of stocks on Democrats.

“The Stock Market suffered one of the Worst Days in History based on the results of the Election. Such a sad thing to watch!” Trump wrote in a post on Truth Social. “It took so much work to get us to a level that no one has ever seen before, and then this. Your 401(k)s have, therefore, dropped. Remember, it wasn’t Republicans, it was Dumocrats. Do not fear, however, we will soon, one way or the other, be BIGGER AND STRONGER THAN EVER BEFORE.”

Tech stocks have surged in recent years as excitement about artificial intelligence has fueled billions of dollars in investments in, and by, the companies that make chips and infrastructure necessary for AI’s development and operation.

Since Election Day 2024, the Nasdaq Composite is still up by more than 30%, despite recent fears that have sharply driven down chip, memory, and other AI- and cloud computing-linked stocks.

But questions about whether AI will enable the kind of productivity necessary to generate returns on those investments have grown louder in recent months.

“I don’t think this is an AI bubble bursting,” said Ed Yardeni, longtime market watcher and president of Yardeni Research. “I think it’s an AI bubble losing some air very, very rapidly, and I think that reduces the likelihood that we’ll get a bursting bubble that has adverse consequences for the economy and broader financial system.”

The selling continued as Asian markets opened on Thursday night. Korea’s Kospi index plunged 8%, triggering a market-wide trading halt. AI data center suppliers Samsung and SK Hynix fell by at least 9% in early trading. Japan’s Nikkei 225 index tumbled 3%.

Markets’ midterm blues

The commanding Democratic victories across the country in Tuesday’s midterm elections hit investors hard Thursday, after stocks initially rallied, on what many said was relief that the results of the midterms were projected quickly and clearly.

Numerous Democrats who won races for governor, attorney general and Senate and House seats have pledged to slow or halt the construction of AI data centers.

Texas, Ohio, Michigan and Georgia were of particular concern, because they are all large data center markets.

Democrats who won other state and federal offices have also voiced concerns about the industry and its companies.

“Today is the cold shower that I anticipated might occur after a blue-wave situation,” Yardeni said.

Elon Musk’s companies SpaceX and Tesla each slid nearly 10%, largely in response to the midterm results. But the two companies are also engaged in developing AI, and SpaceX has recently emerged as a data center developer.

On paper, both of Musk’s companies have shed more than $400 billion in value since Tuesday’s election results.

Musk, the world’s first trillionaire, spent hundreds of millions to help elect Republican midterm candidates. Until Tuesday’s rout, he was seen as one of the largest potential beneficiaries of Republican victories.

Now that voters have so resoundingly rejected the GOP, Musk and his companies face the prospect of tighter regulation and even potential investigations at both the state and federal levels.

Chip stocks lead losses

The sell-off was triggered by two lackluster earnings reports from major chipmakers, Qualcomm and Arm Holdings, which were released on Wednesday night. Both companies posted results that investors generally viewed as mixed.

Arm Holdings slid 13%, while Qualcomm tumbled 9.5%.

The Philadelphia semiconductor index sold off by 12.3%, its worst day since March 2020, when the coronavirus pandemic began to shutter the economy. The “DRAM” ETF, which tracks firms that manufacture computer memory, sank almost 18%.

Earnings reports like these have rattled investors in recent months because of the hundreds of billions of dollars that are being poured into the AI sector.

SanDisk shares plummeted 22%, Micron, Western Digital and AMD fell 17%, while Seagate fell 16%. All of those firms were among the worst performing S&P 500 stocks.

Oil prices rebounded from Wednesday’s drop. Brent crude oil ended the day up by 3.8%. U.S. crude oil rose 2.7% on Thursday.

U.S. Treasury yields, which have faced some competition from tech giants tapping the bond markets to raise funds for their AI ambitions, were slightly lower.

In the wake of the market moves, traders dialed back bets that the Federal Reserve would raise rates during its Dec. 8-9 meeting. Odds are currently around 60%.

The Dow Jones Industrial Average dropped 1,833 points or 3.4%. The biggest contributor to the Dow’s drop was Nvidia, which sold off by 9.2%, its largest one-day decline since April 2025.

Nvidia is the most important supplier to any AI firm, but as investors raise questions about returns, the euphoria in the industry is fading. Nvidia’s shares have tanked 15% over the past three months.

Major established cloud computing providers Alphabet, Meta, Amazon and Microsoft also fell, but less than the overall market declines.

Dow components Cisco and Caterpillar, which are both major suppliers to AI data centers, also dropped around 6%.