Nasdaq loses $2.5 trillion as Democratic win sparks AI fears

The Nasdaq Composite fell 5.5% on Thursday, erasing $2.5 trillion in market value, as investors feared a sweeping Democratic midterm election victory would stall AI infrastructure expansion and increase regulatory scrutiny. The selloff, the index's worst single-day drop since April 2025, marked the second consecutive day of AI stock declines and pushed the Nasdaq into correction territory, down nearly 12% from its October 6 record close. Chip and "neocloud" stocks suffered the largest losses, with the Philadelphia SE Semiconductor index falling 12%, Nvidia dropping 9%, and Advanced Micro plunging 17%. Analysts warned that further selling may be imminent, potentially impacting the planned Anthropic IPO timeline. Local opposition to data center construction, concerns over returns on massive AI investments, and tighter financing conditions for smaller companies contributed to the market turmoil, with Wall Street's VIX fear gauge posting its biggest increase since December 2024.