US stocks: Nasdaq posts biggest drop in 19 months as Democrats’ midterm win fuels AI regulation fears
The index fell more than 10% from its Oct 6 record-high close, confirming a technical correction
The Nasdaq Composite, a key US stock index, plunged to its steepest decline in 19 months on Thursday, Nov 5, following Democrats' victory in the midterm elections. The index slipped more than 10% from its October 6 record, confirming a technical correction. Chipmakers experienced the most significant losses, with concerns over potential tougher AI regulation fueling the downturn.
Democrats' gains, particularly in states with growing opposition to data centers, heightened apprehensions about possible regulatory hurdles that could impede the AI infrastructure expansion that propelled stocks to record highs this year. SimCorp's Melissa Brown noted that while a slowdown is unlikely, any reduction in AI infrastructure development pace could raise concerns due to its reliance on rapid infrastructure expansion.
The S&P 500 and Dow Jones Industrial Average also fell, with the S&P 500 ending the day at 7,353.73 points and the Dow Jones at 51,523.06 points. Volume on US exchanges surged to 26.9 billion shares, a notable increase from the average of 17.7 billion shares over the past 20 sessions.
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