US stocks: Nasdaq posts biggest daily drop in 19 months on fears of AI regulations

The Nasdaq Composite suffered its largest single-day decline in 19 months on Thursday, November 5, 2025, confirming a technical correction, as chipmakers declined on fears of stricter AI regulations following Democrats' victory in the US midterm elections. The index fell over 10% from its October 6 record-high close, marking a significant setback for the tech-heavy index.

Chipmakers, which form a significant portion of the Nasdaq's composition, experienced sharp declines, while other large-cap tech stocks also suffered losses after a rally on Wednesday. Democratic victories, particularly in states where opposition to new data centers has grown, heightened concerns about potential regulatory changes that could impede the AI infrastructure buildout, a key driver behind the recent stock market rally.

Experts suggest that while a slowdown in AI infrastructure development is unlikely to halt the industry entirely, any reduction in pace could pose challenges for the market, given the strong reliance on the rapid development of supporting infrastructure.