Chipmakers and data center operators led the selloff as investors weighed the fallout from Tuesday’s midterm elections, in which Democrats swept Congress and won governorships in key AI buildout states while voters approved restrictions in at least 40 of 41 local data center ballot measures. The Philadelphia Semiconductor Index plunged 12.2% for its second-worst day on record, trailing only its 15.9% drop in March 2020. SanDisk fell 22%, AMD and Micron each sank about 17%, and Nvidia slid 9.3% to erase more than $400 billion in market capitalization and turn negative for 2026, reducing CEO Jensen Huang’s net worth by $15.1 billion to $150.9 billion. The S&P 500 fell 4.33% to 7,355.81, wiping out roughly $2.9 trillion to $3.2 trillion in value as all 11 sectors declined, and the Dow Jones Industrial Average lost 3.45% to 51,515.81.

Goldman Sachs warned that Democratic state and local victories could trigger temporary construction moratoria affecting 45% of planned US data center capacity, including in Texas, where Governor-elect Gina Hinojosa defeated Republican incumbent Greg Abbott after campaigning on a permitting freeze that Jefferies estimates puts 13.3 GW of announced projects at risk. UBS projected that construction pauses could threaten 30% of expected 2028 US capacity additions, while Citrini Research and Wedbush’s Dan Ives called an earlier peak in AI infrastructure capital expenditure growth. The Wall Street Journal reported that OpenAI executives discussed resetting the company’s 2027 data center capacity expectations, and Meta President Dina Powell McCormick said building US data centers is “going to be harder” after the vote.