New to this? Read it in simple words
- US chip stocks fell about 12% on November 5, their worst day since March 2020.
- Investors fear that Democrats who won the elections will slow data centre building.
- Tokyo and Seoul each closed 6.0% lower the next day.
- On Friday the Nasdaq closed 1.09% higher, but it still lost 3.4% over the week.
- Correction
- When a stock index falls at least 10% below its recent high.
- Nasdaq 100
- A list of 100 large companies on the Nasdaq exchange, many of them tech firms.
- Neocloud
- A smaller company that rents out AI computing power.
The fall came two days after the US midterm elections. Democrats won both houses of Congress and key governors’ races, and many winners promised to slow or stop new data centres. Tech stocks have surged in recent years on excitement about AI, NBC News reports.
Thursday in numbers
All three main US stock indexes had their worst day since April 2025 on November 5. The S&P 500 fell 4.36% to 7,353.73. The Dow Jones Industrial Average lost 1,833.06 points, or 3.44%, to 51,523.06. The Nasdaq Composite lost 5.52% to 24,315.00.
That left the Nasdaq Composite more than 10% below its record from last month. Wall Street calls such a fall a correction.
The tech-heavy Nasdaq 100 dropped 6.3%, erasing $2.3 trillion in market value, NBC News reports. The Philadelphia Semiconductor Index, which follows chip companies, fell about 12%. That was its worst day since March 2020.
Nvidia fell 9%, and Broadcom fell 10%. Nvidia alone lost about $374 billion in value, CNBC reports. Micron fell 17%.
US closes on November 5 and Asian closes on November 6. The Nasdaq’s Friday close is the last line.
Why investors sold
Investors fear that a Democratic sweep could slow the data centre buildout, CNBC reports. Hundreds of winning candidates pledged to rein in data centres, according to NBC News.
Bloomberg reports that about 40% of pending US data centre capacity is planned in states whose newly elected governors promised to stop or pause such building. The figure comes from Cleanview, a market intelligence company.
The elections were not the only cause. NBC News says the sell-off was set off by results from Qualcomm and Arm on Wednesday night, which investors saw as mixed. Euronews also points to higher borrowing costs, which raise questions about how quickly companies can build.
President Donald Trump blamed Democrats for the fall in posts on Truth Social, NBC News and Euronews report.
Asia, then a rebound
The selling moved to Asia on November 6. Tokyo’s Nikkei 225 closed down 6.0% at 57,434.77, and Seoul’s Kospi closed down 6.0% at 5,059.69, AFP reports.
The Kospi had fallen as much as 8.8% during the day, which set off a 20-minute trading halt, Euronews reports. Taiwan’s Taiex closed 4.5% lower, and chip maker TSMC closed 4.7% lower.
Some buyers came back in New York on Friday. The Nasdaq Composite closed 1.09% higher at 24,579.42, and the S&P 500 rose 0.31% to 7,376.86, CNBC reports. The Dow fell 0.46% to 51,285.73.
Over the whole week, the Nasdaq lost 3.4% and the S&P 500 lost 2.7%. During Friday’s session, Nvidia was nearly 3% higher and Micron about 5% higher, CNBC reports.
A bubble, or too much fear?
“I don’t think this is an AI bubble bursting,” Ed Yardeni of Yardeni Research told NBC News. He called it “an AI bubble losing some air very, very rapidly”.
Neil Wilson of Saxo Markets said “this looks totally overdone”, but added that the market needs to find some stability first, AFP reports.
The people who worry investors can’t act yet. Gina Hinojosa, the governor-elect of Texas, and others take office in January, CNBC reports. In a CNN interview, Hinojosa said “we need to stop what we are doing with data centers” until Texans have legal protections, according to CNBC.
A second sign from Microsoft
Microsoft plans to use fewer neoclouds, the smaller companies that rent out AI computing, CNBC reports, citing people familiar with the plans. Bloomberg reported the plans first. Microsoft has not decided which ones it will stop using, two of those people said.
Two people also told CNBC that Microsoft chose not to renew a deal with Oracle. Microsoft said only that it regularly reviews such investments “against customer demand”.
CoreWeave and Nebius, two neoclouds, are due to report results next week, CNBC reports.
Sources6
Sources
Every fact in this story comes from the sources below. Open them to check our work.
- 1Research · November 5, 2026Dow drops 1,800 points; Nasdaq tumbles into correction territory on AI tech wreck: Live updates CNBC
- 2
- 3Research · November 6, 2026Asia Markets, Tech Firms Sink on AI Fears; Cyberattacks on Japan AFP via Asia Financial
- 4Research · November 6, 2026European stocks join global rout after worst US chip sell-off since 2020 Euronews via Yahoo Finance
- 5Research · November 6, 2026Some 40% of US Planned Data Center Capacity Is in States Wanting to Hit Pause Bloomberg via Insurance Journal
- 6Research · November 6, 2026Microsoft plans to use fewer neoclouds as AI buildout shows signs of strain CNBC
- 7
The closing prices are market facts. The 40% figure is Cleanview’s, and Bloomberg’s report doesn’t show how it was worked out. The Microsoft plan rests on unnamed sources.
Chip index falls about 12% as US vote hits AI stocks. Silicon AI News, November 8, 2026. https://siliconainews.com/stories/ai-stock-sell-off-after-us-elections
The Nasdaq 100 lost $2.3 trillion and chip stocks had their worst day since 2020; a partial rebound and “overdone” views soften the loss. How we rate the mood
The mood shows how the news frames the event for the tech and AI world: as an opportunity (6 and above) or as a loss (below 5). It is not our verdict on who is right.