US stock markets plummeted, losing USD 2.5 trillion in value as investor concerns over AI infrastructure spending and political uncertainty triggered a sharp sell-off, pushing the Nasdaq into correction territory after a volatile trading session.
US Markets Hit by AI Investment Concerns
Concerns over a possible slowdown in artificial intelligence-related investments wiped out around USD 2.5 trillion in US stock market value on Thursday, as a sharp sell-off in technology stocks erased Wall Street's post-election rally, CNN reported. The sell-off came amid fears that gains by the Democratic Party in the US midterm elections could lead to restrictions on data centre expansion and slow down the country's artificial intelligence infrastructure development.
Market Indices Suffer Significant Losses
The technology-heavy Nasdaq Composite suffered its worst single-day fall since April 2025, when US President Donald Trump announced sweeping global tariffs. The decline also dragged down broader market indices, with the S&P 500 and Dow Jones Industrial Average recording their worst trading sessions since April 2025. The Nasdaq plunged 5.52 per cent to close at 24,315.00, falling more than 10 per cent below the record level it had reached last month and entering correction territory. The S&P 500 declined 4.36 per cent to settle at 7,353.73, while the Dow Jones Industrial Average dropped 1,833.06 points, or 3.44 per cent, to close at 51,523.06.
The sharp losses erased the gains made during Wednesday's post-election rally, when the Dow had surged more than 1,500 points, marking its best trading day since April 2025. The S&P 500 and Nasdaq had also gained more than 1 per cent each during that session.
Tech Sector Under Pressure
Investors turned cautious about technology companies after concerns emerged that Democratic gains in both chambers of Congress and key gubernatorial races could affect the expansion of data centres in the United States. On Wednesday, shares of major technology companies, including Amazon, Meta and Google, had rallied on expectations that new restrictions could reduce their spending on data centres and free up cash, potentially improving profitability. However, investors reversed those trades on Thursday amid concerns that the proposed restrictions could ultimately hurt the technology sector, CNN reported.
Impact on Semiconductor and Infrastructure Firms
Semiconductor companies and businesses linked to data centre infrastructure witnessed heavy selling. Broadcom shares fell 10 per cent, while Nvidia declined 9 per cent. Oracle also dropped almost 7 per cent. Keith Lerner, Chief Investment Officer at Truist Advisory Services, described the volatile market movements this week as more of a knee-jerk reaction than a clear indication of how technology stocks could perform under Democratic control of Congress, according to CNN. The sharp decline reflects growing investor concerns over the future pace of artificial intelligence infrastructure investments in the United States, particularly as data centre expansion and related technology spending remain under market focus. (ANI)
(Except for the headline, this story has not been edited by Asianetnews Editorial staff and is published from a syndicated feed.)
