A post-election slide in chipmakers snowballed, dragging the Nasdaq 100 down 4.5%, as investors bailed from the sector on speculation congressional Democrats will clamp down on the artificial-intelligence industry.
The 8.5% plunge in a gauge of chip giants put the group on track for its worst week since the April 2025 tariff meltdown. Nvidia Corp. slid 7%. Qualcomm Inc. and Arm Holdings Plc’s sank on underwhelming outlooks. Apple Inc. plans to raise about $7 billion from an investment-grade bond sale, adding to a flurry of tech issuance. Tesla Inc. and SpaceX each lost over 7%. Bitcoin fell 4.5%.
Democrats took control of the Senate and House of Representatives in midterm elections, and are set to put closer scrutiny on Silicon Valley interests that had largely been spared during President Donald Trump’s first two years in office.
The threat now is that policymakers turn up the heat on computing hubs essential to AI, slowing the infrastructure buildout and hampering the pace of rollouts that major companies are counting on to boost their bottom lines.
The data-center slowdown due to the political shift is going to be real, and the earnings estimates behind the valuations that were the cornerstone of bullish arguments are no longer valid, according to Michael O’Rourke at JonesTrading.