Stocks slide on Wall Street as investors worry about data centre backlash following US midterms

On Thursday, tech stocks plummeted on Wall Street due to concerns over AI data center projects following the US midterm elections, erasing post-election gains. Oil prices rebounded, dampening equity sentiment. The tech-focused Nasdaq Composite fell over five percent in late morning trading before recovering some of its losses. Chipmakers, particularly Nvidia, AMD, and Micron, suffered significant losses.

These companies provide processors and memory for AI data centers, a key driver of revenue growth. Data centers have faced opposition from US voters, and many midterm winners pledged to halt or slow such projects. Analysts noted that AI stocks fueled the rally this year and that markets dislike uncertainty. If the sector faces more headwinds, the market action could turn to general panic.

The Philadelphia Semiconductor Index declined more than eight percent. Oil prices rebounded after falling 10 percent on Wednesday due to hopes of ending the US-Iran war with Democratic pressure for diplomacy. European stocks initially rose but ended the day lower. Tech-heavy Asian markets slipped, with Seoul shedding over five percent.

The British pound was stable after the Bank of England raised interest rates for the first time in over three years to combat inflation. Other companies saw mixed results, with Air France-KLM shares rising nearly 13 percent despite higher operating costs, and Rheinmetall plunging over 15 percent after Germany canceled a major defense contract.