[New York Stocks] Democrats Score Biggest Victory Since 2008... Nasdaq Plunges 5% on AI Regulation Concerns (Roundup)

All three major U.S. indexes plunge
CNBC: "Entering a correction"
Nvidia and Broadcom plunge nearly 10%

With Democrats expected to win the House by the largest margin since 2008 in the U.S. midterm elections, concerns over artificial intelligence (AI) regulation flared up, sending all three major U.S. stock indexes sharply lower at the close on Thursday (local time). The New York stock market, which had surged the previous day, gave back all of its gains in a single session, while the Nasdaq fell more than 10% from its recent high.

On the New York Stock Exchange, the Dow Jones Industrial Average closed at 51,523.06, down 1,833.06 points, or 3.44%, from the previous session. The S&P 500 plunged 334.89 points, or 4.36%, to 7,353.73, while the tech-heavy Nasdaq Composite tumbled 1,421.51 points, or 5.52%, to close at 24,314.99.

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

All three indexes posted their steepest declines since April 2025. CNBC reported that the Nasdaq had fallen more than 10% from the record high it reached in October, entering correction territory.

Markets were dragged lower as concerns about AI regulation mounted following the Democrats' sweeping victory in the midterm elections. With Democrats regaining majorities in both chambers of Congress and winning key gubernatorial races, speculation grew that investment in AI data centers and infrastructure across the United States could slow.

In particular, independent Senator Bernie Sanders, who caucuses with Democrats, called for a nationwide halt to data center construction. In a social media post on Wednesday, he said, "The American people do not want Big Tech oligarchs destroying the environment, eliminating jobs, and threatening the future of humanity."

AI and Data Center Stocks Plunge... Aftermath of Texas' 'Blue Tsunami'

Companies in the semiconductor and data center sectors, which have led the expansion of AI investment, fell sharply for a second straight day. Nvidia and Broadcom dropped 9.19% and 10.64%, respectively, while Oracle lost 7.0%. Qualcomm reported earnings that beat market expectations, but its shares plunged 9.3% as its outlook for future results fell short of expectations.

Shares of SpaceX and Tesla, both led by Elon Musk, plunged 10.8% and 9.1%, respectively. After falling sharply for two consecutive trading sessions, the two companies lost around 500 trillion won in combined market capitalization.

Both companies are headquartered in Texas. Foreign media reported that investors were concerned after Democrats won Texas's Senate, gubernatorial, and attorney general races, an unprecedented sweep for the party. The report added that the results reflected concerns that oversight of Musk's businesses could intensify, as data center regulation has become a political issue in Texas and Musk's support for Republicans has drawn attention.

As selling spread across the semiconductor sector, the iShares Semiconductor ETF (SOXX), which invests in major semiconductor companies, fell 12.8%. This was its biggest decline since March 2020, at the start of the COVID-19 pandemic.

Neocloud companies that provide cloud infrastructure for AI data centers were also hit hard. CoreWeave fell 9.8%, while Nebius and IREN plunged 14.9% and 16.9%, respectively. The declines appeared to reflect concerns that the Democrats' election victory could spur local opposition to data center construction and intensify efforts to tighten regulations.

Tim Holland, chief investment officer (CIO) at Orion, said, "Investors are scaling back their investments until it becomes clearer how the midterm election results will affect the AI capital expenditure cycle, which has been the biggest driver of U.S. economic growth over the past three years." He added, "The key question is what policy direction and stance the party that won decisive victories at both the federal and state levels will take going forward."

Industrials and Financials Also Hit... Oil Prices Rise as Supply Uncertainty Grows

The sell-off that began in tech stocks spread across the broader market, including industrials and financials. Caterpillar, a construction equipment maker, fell 6.3%, while JPMorgan Chase, the largest U.S. bank, dropped 41.9%. Boeing, an aircraft manufacturer, and Nike, a sporting goods company, also fell 2.5% and 2.3%, respectively.

Keith Lerner, CIO at Truist Wealth, said, "Unlike the previous day, the sell-off in tech stocks has become so intense that it is now spreading across the broader market," adding that "the rubber band is being stretched tighter and tighter."

International oil prices turned higher as uncertainty surrounding crude oil supplies from the Middle East increased. West Texas Intermediate (WTI) crude for December delivery settled at $90.52 a barrel on the New York Mercantile Exchange, up 2.72% from the previous session. Brent crude for January delivery rose 3.88% to $98.29 a barrel on the ICE Futures Exchange.

International oil prices had plunged more than 8% the previous day on hopes that the war with Iran could end early after Democrats took control of both chambers of Congress in the U.S. midterm elections, but they rebounded a day later.

International gold prices rose to their highest level in about two weeks, buoyed by a weaker dollar and falling U.S. Treasury yields. U.S. gold futures for December delivery settled at $4,113.50 an ounce, up 1% from the previous session.

The sharp drop in international oil prices, as the Democrats' sweeping midterm victory eased concerns about an escalation of the war with Iran, was seen as reducing inflationary pressure and the need for further interest rate hikes by the Fed.

The dollar fell to its lowest level since September 30, and the yield on the 10-year U.S. Treasury note also reached its lowest level in about two months. However, the market still puts the probability of a Fed rate hike in December at 66%.

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