Democrats’ election win spooks AI investors, hammering stocks

Two days after Democrats flipped seven seats in the Senate, gained at least 39 in the House of Representatives and picked up five governorships, stocks sold off across the board, with the tech-heavy Nasdaq Composite notching a 5.56% drop, its most dramatic fall in 19 months.

The election reflected broad dissatisfaction across America with President Donald Trump, particularly his launching of a war in Iran that has sent fuel costs soaring, powering Democratic wins in Republican-led states including Texas, South Carolina, Kansas and Iowa.

“Investors appear to be recognising that ⁠ some newly elected members of Congress and governors are looking to slow the pace of AI infrastructure development,” said Melissa Brown, global head of investment decision research at SimCorp.