US stocks plunge as AI data center limits in Texas spark tech sell-off

US stocks plunged Thursday, with the Nasdaq falling up to 5.7% into correction territory, as Democratic midterm gains and proposed AI data center restrictions in Texas triggered a broad tech sell-off. The S&P 500 faced its worst day in over a year. Chipmakers led the decline, with Nvidia dropping 7% and Qualcomm falling 11.5% after missing projections. Democrat Gina Hinojosa's victory in the Texas gubernatorial race, where she campaigned on halting new data center projects, fueled investor anxiety. The Cboe Volatility Index surged 50% to a seven-month high. Analysts offered mixed views, with some calling the drop a knee-jerk reaction while others saw potential benefits in curbing overbuilding. The sell-off follows a turbulent year for tech stocks, with volatility expected ahead of potential public listings from AI developers Anthropic and OpenAI.