US stocks shed more than $3tn in a day of chaotic trading which saw the tech-heavy Nasdaq 100 plunge 6.4 per cent after Democrats’ sweeping midterm election victory upended Wall Street’s mammoth AI bet. The market value drop on the S&P 1500 Composite index was the biggest on records stretching to the turn of the millennium according to FT calculations based on Fact Set data.
Traders stampeded out of tech shares on fears that Democrats’ victory over Donald Trump’s Republicans in Tuesday’s midterms would upend the AI spending boom that has driven Wall Street to record highs this year. “[Investors] are throwing in the towel and indiscriminately liquidating,” said Adam Crisafulli, president of market research group Vital Knowledge.
Selling among chipmakers was brutal, with Nvidia tumbling 9.3 per cent, pushing its market value down more than $400bn. The S&P 500 index lost 4.4 per cent, its worst session since last year’s “liberation day” ructions. Qualcomm dropped 9.5 per cent, Broadcom fell 10 per cent and Micron shed 17 per cent.
Investors fear newly elected politicians who campaigned against data centres will hit the brakes on AI infrastructure development, eroding Wall Street’s expectations for vast spending on chips, servers and facilities.
Source: Financial Times Companies · Summarized by HeadlinesBriefing