Wall Street loses trillions as AI stocks plunge on Democratic regulatory fears

Wall Street suffered its worst day in over a year as the Nasdaq Composite plunged 5.52%, erasing roughly $3 trillion in market value from the S&P 500 on fears that Democratic midterm victories will lead to stricter regulations on AI data centers. The selloff, which marked the second consecutive day of losses for AI-linked stocks, hit semiconductor makers hardest, with Nvidia falling about 9% and losing approximately $400 billion in market value. The "Magnificent Seven" tech giants collectively lost around $800 billion, while the Nasdaq entered correction territory, nearly 12% below its October 6 record. The decline was triggered by Democratic wins in gubernatorial races and Congress, where candidates campaigned on slowing data center construction due to concerns over energy and water usage. Analysts estimate about 30% of planned US data center capacity growth through 2028 could be at risk, adding to existing investor doubts about AI investment returns amid higher interest rates.