Nasdaq heading for worst day in 18 months as Wall Street sustains widespread losses

Wall Street faces its worst day in 18 months as the Nasdaq index teeters on the brink of a significant decline. The tech-heavy index is projected to tumble 10% below its recent record high, marking its most substantial one-day fall since April 2025. The crisis stems from concerns surrounding the artificial intelligence sector, which is anticipated to face stricter regulation following the midterm election results.

Investors are bracing for a potential "sell everything" scenario, as the anticipation of tougher scrutiny on datacenter expansion plans causes widespread losses across Wall Street. Chip stocks, particularly SanDisk and Western Digital, show the heaviest losses, with SanDisk falling 19% and Western Digital sinking 16.5%. Wall Street's fear gauge, the VIX, surged by 40%, reaching its highest levels since the onset of the Iran war, indicating rising market volatility.

Analysts cite the impending Democratic takeover in various states and local elections as a key driver behind the market downturn, suggesting that the party may stifle datacenter development. Analyst Neil Wilson at Saxo UK predicts a "complete capitulation-level event," warning of a looming momentum unwind in tech stocks. The Dow Jones industrial average (DJIA) fell by 2.8%, reaching 51,868 points, while the S&P 500 declined by 3.7%.

The sell-off follows a recent rally in Europe, which has since fizzled out, with Britain's FTSE 100 closing down 0.4% at 10,782.66. The market's swift reversal contrasts with Wednesday's record-breaking rally driven by expectations that the Democratic party's success in the US midterm elections could curb the White House's policies.

President Donald Trump retweeted his joy at the stock market's highs, boasting about the 91-day record set during his second term. Tech analyst Dan Ives warns that the midterms signal a slowdown in datacenter buildout, indicating that the 'promise of AI' might give way to the 'price of AI.'