AI Election Shock Sinks Nasdaq 6.4%

The Nasdaq 100 plunged 6.4% after the Democratic Party's landslide midterm election victory raised fears of curbs on data centre investment, threatening the AI-driven market rally and US economic growth. The election result, driven by inflation backlash and opposition to AI infrastructure, has investors worried about construction delays. Around 40% of planned US data centre capacity sits in states where new governors pledged moratoriums, potentially reducing orders for chips and equipment. The decline exceeded the Nasdaq's previous five-year worst drop of 6.07% in April 2025. Market rotation into defensive sectors had already begun, and analysts warn of a possible credit event among debt-laden AI companies, with Asian markets also suffering heavy losses.