Nasdaq 100 risks losing nearly $2 trillion — what investors fear after the Democrats’ victory
Kyiv • UNN
The Nasdaq 100 plunged amid fears of data center construction delays following the Democrats’ election victory. The semiconductor index fell by 8.4%.
On Thursday, the Nasdaq 100 index faced the risk of losing $1.8 trillion in market value: investors fear that a convincing Democratic victory in the midterm elections could slow the expansion of artificial intelligence (AI) infrastructure, UNN reports, citing Reuters.
The sell-off marked a sharp reversal from the market’s fairly restrained reaction the previous day. At that time, the index, which includes leading technology companies, was rising amid hopes that the end of pre-election uncertainty would improve overall sentiment.
"Wall Street desperately needs positive news related to artificial intelligence right now," says Matthew Tuttle, founder and CEO of Tuttle Capital Management. "We will probably face two years of stagnation: divided government, intense political confrontation and a minimum of decisions being passed."
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Shares of semiconductor manufacturers and companies developing cloud technologies — sectors that have accounted for a significant share of market growth recently — fell for a second consecutive day. Investors fear that the construction of data centers, estimated to cost billions of dollars, could face delays.
The Philadelphia SE Semiconductor Index (.SOX) fell 8.4%, reaching its lowest level in more than six months. Major market heavyweights such as Nvidia (NVDA.O) and Broadcom (AVGO.O) made the largest contributions to the decline.
Shares of so-called "hyperscalers" (large cloud providers) also fell. They had held up on Wednesday, as some hoped that a slowdown in data center construction would help contain the technology giants’ enormous AI spending. However, on Thursday, Amazon.com (AMZN.O) shares fell 2.5%, while Alphabet (GOOGL.O) shares declined 1.4%.
The publication notes that these losses indicate that investors are beginning to factor in the risks: political deadlock and tighter controls over the creation of data centers could slow one of Wall Street’s key growth drivers.
According to UBS analysts, about 30% of the new data center capacity planned for 2028 in the United States could be at risk due to possible pauses in construction. This highlights serious risks for an industry whose growth depends directly on the rapid construction of new facilities. Political instability is negatively affecting the artificial intelligence sector — an area that had already been on shaky ground in recent weeks due to concerns about the enormous sums being invested in the technology.