The U.S. mid-term renewal earthquake hits Wall Street: freezing data centers sparks slowdown fears

U.S. equity markets lost trillions of dollars in a single trading session after the midterm election results revealed a political and legislative shift that threatens the pace of expansion in artificial-intelligence computing. The composite Nasdaq fell more than 5.5 percent, wiping out about $2.5 trillion of market value in its worst day since 2025, and officially entering correction territory after slipping more than 10 percent from its recent peak. The decline coincided with Democrats taking control of both the Senate and the House following campaigns that openly advocated curbing the rapid growth of data centers and limiting their energy and supply-chain consumption.

The bleed did not stop at the broad index; the sharpest blows hit the core of the tech supply chain. Nvidia lost over 9 percent of its market value, equivalent to about $400 billion evaporating, while AMD and Micron shares surged more than 17 percent, Intel fell 10.3 percent, and Sandisk slid over 22 percent. This collapse pushed the Philadelphia Semiconductor Index, which tracks the performance of the 30 largest chip manufacturers, down more than 12 percent. In the same vein, shares of Elon Musk’s Tesla and SpaceX fell about 11 percent and 8 percent respectively, together shedding more than $300 billion, despite Musk spending roughly $450 million to support Republican campaigns, including $45 million for the Texas Senate seat that Democrats secured. Overall, the seven biggest tech stocks, including Apple, Nvidia and Tesla, lost $1 trillion in a single trading day.

The drop exceeded normal daily volatility and revived the postponed question about the economic viability of the massive sums that major firms have poured into infrastructure without comparable returns. In Texas, Democratic gubernatorial candidate Gina Hinojosa won after running a campaign focused on halting new data-center licences, while Senator Bernie Sanders called for an immediate nationwide freeze on their construction, insisting that Americans reject environmental depletion and job loss. President Donald Trump, in turn, blamed his political opponents for the retreat, calling it a negative indicator caused by the election results and asserting that the market will return to being larger and stronger than before.

Silicon-Valley leaders were surprised by the scale of popular anger that ballot boxes expressed against data centers.Greg Brockman, co-founder and CEO of OpenAI, told the Wall Street Journal Tech Conference in California that the sector had not anticipated the strong local community backlash, noting that building infrastructure in Texas and Georgia no longer happens through tweets from San Francisco but requires on-the-ground presence and persuasion. At the same conference, Meta chief Dina Paul Makormik urged a doubling of efforts to convince the public of AI’s value, while Susan Strieter, head of wealth-club investment strategy, said the Wall Street panic reflects a clash between fears of delayed returns and the prospect of a sharp slowdown in data-center construction.

This legislative shift in Washington reshuffles the priorities of the technology landscape in the Middle East.Enterprises and firms in the Gulf and Egypt that lease compute capacity from U.S. data centers now face a new reality: any freeze or slowdown in U.S. data-center construction, combined with volatile energy prices and rising operating costs there, will directly affect the pricing of cloud-inference services and model-hosting contracts for the region. The Western slowdown also strengthens the case for regional projects aimed at localising data centers and ensuring independence of computing infrastructure, and forces Arab tech leaders to harden their operational plans against supply bottlenecks and foreign-policy fluctuations.