Nasdaq posts biggest daily drop in 19 months on fears of AI regulations
Democratic victories on Tuesday raised concerns that tighter regulations could slow AI infrastructure expansion, which has helped drive stocks to record highs this year, amid growing opposition to data centres.
The Nasdaq Composite experienced its largest daily decline since April 2025, dropping more than 10% from its October 6 record high. This sharp correction came as chipmakers faced concerns over potential stricter AI regulation following Democrats' control of the US Congress. Nvidia's shares dropped over 9%, while the Philadelphia Semiconductor index declined over 12%.
The market witnessed a loss of $3 trillion in stock value from S&P 500 companies. Melissa Brown, global head of investment decision research at SimCorp, noted that while a slowdown in AI infrastructure development might be concerning, it is unlikely to halt the growth altogether. The index confirmed a technical correction, a 10% drop from its October 6 peak.
Major tech stocks like Meta Platforms, Amazon.com, and Alphabet also faced declines, while data center companies such as IREN and Applied Digital fell more than 14%. The S&P 500 closed at 7,353.73 points, down 4.36%, and the Dow Jones Industrial Average fell to 51,523.06 points, down 3.44%.
Written by urgent.news from Free Malaysia Today's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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