U.S. technology stocks faced significant declines following the Democratic Party’s victories in the midterm elections, which resulted in their control of both the Senate and the House of Representatives. This political shift has sparked concerns among investors about potential new regulations targeting artificial intelligence and data centers, which had been a focal point of many Democratic campaigns.
On Wednesday and Thursday, the tech-heavy NASDAQ composite index plummeted by 5.5%. The sell-off affected major tech companies, known as the “magnificent seven,” including Apple, Nvidia, and Tesla, which collectively lost approximately $1 trillion in market value in a single trading day. Shares of Nvidia dropped over 9%, while Tesla’s and SpaceX’s values dropped 11% and 8%, respectively, resulting in a loss of more than $300 billion for both companies.
The fallout extended to global markets. On Friday, Japan’s Nikkei index closed 6% lower, driven by substantial losses in major memory chip manufacturers Kioxia and Tokyo Electron. South Korea’s Kospi index experienced a significant decline as well, falling by over 8% at one point, which triggered a circuit breaker to temporarily halt trading. European markets also opened lower, but the declines were less drastic due to a smaller representation of tech stocks in these indexes.
Market analysts are closely monitoring the situation, as uncertainty surrounding regulatory changes could continue to affect investor sentiment. In the meantime, President Donald Trump expressed his support for artificial intelligence, stating he is “100%” in favor of the technology.
