Wall Street sell-off deepens as AI infrastructure bets unravel

Wall Street suffered a severe sell-off, with the NASDAQ plunging 6.3% and the S&P 500 falling 4.3%, as investor sentiment on AI infrastructure reversed sharply following a Democratic Congress victory. The rout was driven by fears that Democrat control would slow AI data centre build-outs, with voters rejecting developments in local ballots and Texas officials signaling potential halts. Automated trading algorithms accelerated the decline, while defensive assets like Treasuries and gold rallied. The VIX fear gauge soared 70% to 28 points, nearing nervous-market territory. Analysts view the drop as a sentiment shock rather than a fundamental change, though continued selling could impact Australian superannuation funds, which hold roughly 20% exposure to Wall Street.