Artificial intelligence stocks came under pressure overnight as Democrats — seen as proponents of data center moratoriums — won big in midterm elections, with a key victory in the gubernatorial race in Texas, a key tech hub.
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Futures on the tech-heavy Nasdaq-100 were down 2%, more than double the decline in Dow Jones Industrial average futures. The State Street Technology Select Sector SPDR ETF (XLK) was down 2% on the Robinhood trading platform.
The more direct plays saw bigger losses. High-risk neocloud CoreWeave — which uses borrowed money to build data centers — was off by 7% on Robinhood. Peer Nebius Group fell 4%. Elon Musk's AI data play SpaceX, which is headquartered in Texas, was off by 6%. Oracle lost 4% on Robinhood.
Markets were already anticipating the Democrats to win the House of Representatives and possibly take Senate control. But the Texas governor mansion going to Democrats appeared to be the biggest blow to tech stocks, with shares selling off overnight as signs pointed to Democrat Gina Hinojosa winning.