Wall Street’s sell-off on Thursday, 5 November 2026, centered on one issue that played a large role in this week’s midterm elections: data centers. Investors dumped chip, memory and AI cloud stocks on fears that a Democratic Congress could slow the buildout of the facilities that power artificial intelligence.
The Nasdaq Composite fell 1,421.52 points, or 5.52%, to close at 24,315.00. It was the index’s worst day since the April 2025 “Liberation Day” sell-off.
The decline left the Nasdaq about 12.3% below its 52-week high of 27,722.75. That confirmed a technical correction, which is a drop of at least 10% from a recent high.
Data Centers Become a Political Issue
Democrats won majorities in both the House and the Senate in Tuesday’s elections. They also won key governor races, including in several states that host major data center projects.
Public opposition to data centers has grown over electricity demand and rising utility bills. Critics also point to noise, air pollution, water shortages and the small number of permanent jobs the sites create.
In Texas, Democratic governor-elect Gina Hinojosa has called for an immediate moratorium on building new data centers. Democrats are generally seen as more skeptical of fast AI expansion than Republicans, who have largely pushed for deregulation.
The new Congress does not take office until January 2027. For now, no new rules have been passed.
Memory and Storage Stocks Hit Hardest
Companies that supply parts for data centers took the heaviest losses. Memory and storage makers Seagate, Western Digital and Sandisk fell by as much as 22%, according to DPA.
Advanced Micro Devices dropped about 15.5% and Micron Technology fell close to 15%. Broadcom lost more than 9%, while Nvidia fell between 8.7% and 9.3%, depending on the report, making it the worst performer on the Dow.
The Philadelphia Semiconductor Index plunged around 11%. Cloud firms that rent out AI chips also slid, with CoreWeave down about 12.5% and Nebius Group down around 13%.
Qualcomm added to the pressure after its fourth-quarter smartphone chip forecast missed estimates. The stock fell between 9% and 13.5%, as the company cited weak demand and lower Apple-related revenue.
Tesla fell between 9% and 11%, according to reports. Shares of SpaceX, also led by Elon Musk, dropped 9%.
The broader market also fell. The S&P 500 dropped 4.36% to 7,353.73, its biggest daily decline since April 2025, and the Dow Jones Industrial Average lost 1,833.06 points, or 3.44%, to 51,523.06.
The Nasdaq 100 sank 6.36% to 26,629.81, wiping $2.3 trillion off its market value. The index remains up 5.5% since the start of the year.
The Cboe Volatility Index jumped more than 34% to around 22.4. Investors moved money into government bonds, while Bitcoin fell about 5% to around $76,500.
The selling started in Asia. South Korea’s KOSPI fell 5.28% to 5,383.80, and the exchange paused program trading for five minutes after a sharp morning drop.
Samsung Electronics fell 7.57% and SK hynix dropped 9.46%. Foreign investors sold a net 3.39 trillion won worth of Korean shares.
Investors now turn to Friday’s US October jobs report. It is the next major US economic release after Thursday’s sell-off.
