One day of relief, then a reversal
US stocks fell hard on Thursday, one session after the best day for the Dow since April 2025. The Nasdaq Composite dropped about 3.9% and closed more than 10% below its record set in October, which puts the index in a correction. The S&P 500 fell about 2.8% and the Dow lost more than 1,100 points, giving back most of Wednesday's gain of about 1,500 points.
The damage was concentrated in the hardware layer. Micron and AMD each fell roughly 15%, Nvidia lost about 8%, and CoreWeave and Nebius, which rent out AI computing, dropped 14% and 18%. The semiconductor ETF SOXX slid as much as 11%, its worst session since March 2020. Qualcomm fell about 10% even after beating estimates.
The trigger was an election, not earnings
Investors were not reacting to a failed funding round or a collapse in demand. They were reacting to Tuesday's results. Democrats won the House and the Senate, and data centers were on ballots in ten states. Voters backed restrictions or rejected expansion in 40 of 41 local measures. The incoming Texas governor campaigned on pausing new data-center construction, and Texas is one of the largest markets in the country.
UBS estimates that nearly a third of the new US data-center capacity expected in 2028 could be delayed or lost if pauses spread. One portfolio manager told CNBC that investors are stepping away until they can see what the midterms mean for the AI capital-spending cycle.
Asia split, and the companies answered
The selling was not global. South Korea's Kospi fell 5.3% and SK Hynix lost 9%, because memory chips were the centre of the trade. Hong Kong's Hang Seng Tech rose more than 5%.
OpenAI published a set of commitments on Thursday. The company said it will pay the full cost of electricity and grid work at data centers it owns and operates, publish construction plans, take community input and avoid non-disclosure agreements with public officials. The pledges are not legally binding. Microsoft has made similar promises.
Oil added to the mix. Crude dropped 8% on Wednesday as traders bet the election would push Washington toward a deal with Iran, then steadied near $88 a barrel.