AI-related spending concerns trigger $2.5 trillion drop in Nasdaq-100 after U.S. midterms
Global tech stocks fell sharply on worries about AI capital spending and possible regulatory scrutiny following the U.S. midterm elections, while Indian markets rose.
Global technology shares slid on November 5 as investors grew uneasy that the large infrastructure outlays needed for the artificial intelligence boom could be delayed, costly to finance and slower to generate returns. The anxiety intensified after the U.S. midterm election, where Democratic wins raised expectations of tighter oversight of data-centre projects.
The Nasdaq-100 fell 6.36%, wiping about $2.53 trillion from its adjusted market value, according to Nasdaq data. The broader Nasdaq Composite dropped 5.52%, while the S&P 500 and Dow Jones Industrial Average slipped 4.36% and 3.44% respectively.
Semiconductor stocks led the decline, with the Philadelphia Semiconductor Index down 12.2%. Nvidia lost roughly 9%, and both AMD and Micron Technology fell more than 17%.
Asian markets mirrored the weakness: South Korea’s KOSPI fell 6.02% after an intraday plunge of over 8%, Japan’s Nikkei 225 declined 5.96%, and Taiwan’s TAIEX slipped 4.51%.
Indian equities moved in the opposite direction. The Sensex rose 1,718 points, or 2.17%, to close at 81,028.02, and the Nifty 50 advanced 2.01% to 25,030.35.
Foreign portfolio investors were net buyers of Indian shares worth ₹14,974.68 crore on November 5, while domestic institutional investors recorded net sales of ₹10,444.54 crore, according to provisional exchange data.
A Macquarie Research note warned that post-election regulatory proposals in Texas, Georgia and Ohio could impose moratoriums or restrictions on new data-centre projects, potentially lengthening approval times and raising costs. The note suggested that approved but unleased capacity might gain value if fresh supply is delayed, benefiting well-capitalised operators.
Analysts also flagged broader concerns that slower data-centre construction could limit chip-maker revenues if financing, electricity or regulatory hurdles persist, though demand remains strong. AMD reported a 97% year-on-year rise in data-centre revenue to $8.55 billion in the September quarter, and a Huatai Research analysis projected about 50% sequential growth for the segment in the December quarter.