[U.S. Stocks] "Blue Tsunami" Fuels AI Regulation Fears; Nasdaq Plunges More Than 3%

Sell-off spreads across semiconductor and data center stocks
Oil prices rise again

All three major U.S. stock indexes were lower on Nov. 5 (local time). After Democrats won a landslide victory in the midterm elections, reclaiming majority control of both the House and Senate, concerns grew within a day that regulation of the artificial intelligence (AI) industry could tighten, triggering a broad sell-off led by semiconductor and data center stocks.

As of 10:05 a.m. in New York, the Dow Jones Industrial Average was trading at 52,929.17, down 426.95 points (0.80%) from the previous session. The S&P 500, which tracks large-cap stocks, fell 139.60 points (1.82%) to 7,549.02, while the Nasdaq Composite, dominated by technology stocks, declined 831.72 points (3.23%) to 24,904.66.

New York Stock Exchange. New York, U.S. = Special Correspondent Hwang Yunju.

Markets were focused on the possibility of tighter regulation of the AI industry following the Democrats' landslide victory. With Democrats also winning key gubernatorial races, concerns were mounting that data center construction and the expansion of AI infrastructure across the United States could face obstacles.

As a result, semiconductor and data center stocks, central to the AI industry, fell for a second consecutive session. Nvidia and Broadcom each dropped 5%, while Oracle fell nearly 5%. Tesla and SpaceX plunged 9% and 7%, respectively. Qualcomm's shares fell 9% despite the company reporting earnings that beat market expectations, as its outlook for future results fell short of expectations.

Neo-cloud companies that provide cloud infrastructure for AI data centers also fell across the board. CoreWeave dropped 9%, Nebius fell 13%, and IREN declined 11%. The declines came as the midterm elections drew attention to opposition from residents in some states to data center construction, as well as moves to tighten regulations.

By contrast, shares of AppLovin, an AI-powered advertising platform company, surged 32% after it reported earnings and issued an outlook that beat market expectations.

U.S. stocks had risen sharply the previous day, reflecting the Democrats' midterm election victory. The Dow surged more than 1,500 points, its biggest gain since April 2025, after results showed that Democrats had secured stable majorities in both the House and Senate. The S&P 500 and Nasdaq Composite also rose more than 1% each.

Market experts said stock market volatility could increase as uncertainty over policy changes grows following the midterm elections.

Jordan Watson, a portfolio manager at Tandem Investment Advisors, said, "Volatility could increase further as investors digest the election results and their potential policy implications."

He said, "The previous day's stock market rally should not be taken as a sign that all uncertainty has been resolved. Rather, it is a signal that investors need to take a sober look at whether the enormous amounts of capital being invested in AI infrastructure can generate the returns they expect."

Oil prices rebounded after plunging the previous day. West Texas Intermediate (WTI) crude for December delivery rose 2.28% from the previous session to $90.13 a barrel on the New York Mercantile Exchange. Brent crude for January delivery gained 2.62% to $97.10 a barrel on the ICE Futures Exchange.

This content was produced with the assistance of AI translation services.