Democrats' midterm win triggers $2.5 trillion Wall Street AI sell-off

US stocks suffered their steepest one-day fall since April 2025 on Thursday, with the Nasdaq Composite plunging 5.5 percent and wiping out $2.5 trillion in market value. The sell-off was driven by fears that Democrats' midterm election victory could slow US data centre expansion and increase scrutiny of AI infrastructure. The Nasdaq 100 fell 6.4 percent, pushing the Nasdaq Composite into correction territory, down nearly 12 percent from its October 6 record high. Semiconductor stocks led losses, with the Philadelphia Semiconductor Index dropping 12 percent, Nvidia falling 9 percent, and AMD plunging 17 percent. Data centre operators and equipment suppliers also declined sharply. Investors worry Democratic gains could strengthen local opposition to data centres over electricity and water concerns, potentially delaying permits. UBS estimates around 30 percent of expected US data centre capacity additions in 2028 could be at risk. Funding pressures also emerged, with CoreWeave's credit default swap spreads hitting a record high.