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The Nasdaq Composite fell 5.52% on Nov. 5, its steepest one-day decline since April 2025, while Reuters estimated that the Nasdaq-100 lost $2.5 trillion in market value. Investors were reassessing the cost and political risks of planned AI data centers after the U.S. midterm elections; potential policy changes remain uncertain.
The Nasdaq Composite fell 5.52% on Thursday, Nov. 5, closing at 24,315.00, its largest one-day decline since April 2025. Reuters estimated that the separate Nasdaq-100 lost $2.5 trillion in market value as investors weighed whether political changes after the U.S. midterm elections could slow or raise the cost of AI data center projects.
Nasdaq’s published index data shows the Composite lost 1,421.51 points. The Nasdaq-100, which tracks 100 large non-financial companies listed on Nasdaq, fell 6.36% to 26,629.81. Reuters’ $2.5 trillion figure refers to market value erased from the Nasdaq-100, not all companies traded on the exchange.
The selloff was especially severe among chipmakers. The PHLX Semiconductor index dropped 12.25% to 9,011.14. Reuters reported that Nvidia fell 9% and AMD fell 17%; several data center operators lost more than 14%. Amazon and Alphabet declined 2.2% each, while Microsoft fell 3.6%, according to the source account.
The Composite ended 11.9% below its Oct. 6 record, putting it in correction territory, commonly defined as a decline of at least 10% from a recent peak. The source material attributes the market move to investor concerns about data center spending and political oversight; it does not establish that any new policy had already changed project approvals or company costs.
Nasdaq Sells Off as Investors Reassess AI Data Center Costs
After the U.S. midterm elections, investors weighed the cost and political outlook for AI data center projects. Possible policy effects remain uncertain.
The market reaction
The $2.5 trillion estimate applies to the Nasdaq-100; the Composite is a separate index.
Correction territory
The index closed 11.9% below its Oct. 6 record, after falling 1,421.51 points to 24,315.00.
Among the hardest hit
The PHLX Semiconductor index fell 12.25%; Reuters reported Nvidia down 9% and AMD down 17%.
Costs in focus
Power, land, water and grid connections shape the expense of building AI capacity.
What investors are weighing
The election shifted expectations, but the source material reports no new federal law changing project rules.
- Permitting and political oversight
- Power and infrastructure costs
- Tax incentives and public support
- Effects on specific projects
- Whether planned capacity will change
- How much policy concerns drove the selloff
Forecast, not cancellations
The cited UBS estimate concerns planned capacity additions, not confirmed project outcomes.
Signals to watch
Concrete decisions and company disclosures can show whether investor concerns affect project economics.
Watch for changes to permits, tax incentives and infrastructure rules.
Look for announced construction schedules or revisions to planned capacity.
Capital spending and power needs may clarify who bears the costs.
The Cost of Building AI Capacity
The drop shows how sensitive technology valuations have become to assumptions about the pace and expense of AI infrastructure. Large data centers require substantial power, land, water and grid connections. If projects are delayed, become more expensive, or receive less public support, investors may revise expectations for companies building facilities and for suppliers selling chips and equipment.
The political question matters because permits, power infrastructure and tax incentives can involve decisions at several levels of government. The source material says Democrats won control of Congress and flipped several governorships, including in states expected to host data center development. Investors are considering what that could mean, but the market reaction reflects expectations, not a confirmed change in law or construction plans.
For readers, the losses also underline the difference between market-wide headlines and index-specific figures. The $2.5 trillion estimate applies to the Nasdaq-100; the Composite’s percentage decline measures a different index. Neither figure alone says how much a particular investor lost or predicts what markets will do next.
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A Selloff After Election Day
The decline followed a mixed pair of sessions. On Wednesday, Nov. 4, the Nasdaq Composite rose 1.44%. Reuters reported that data center operators and power companies fell that day, while Amazon and Microsoft rose about 6% during the session. One strategist told Reuters that existing data centers might benefit if fewer new facilities were built. On Thursday, that apparent distinction between infrastructure owners and major technology companies did not hold: several large technology stocks also declined.
Nasdaq’s closing data puts Thursday’s Composite loss above the daily declines during the April 2025 tariff shock. The largest prior one-day fall in the source’s comparison was 5.82% on April 4, 2025; Thursday’s decline was 5.52%. Reuters described the session as the deepest one-day drop since the April market shock. The source also reports that the VIX, a measure of expected stock-market volatility, had its largest increase since December 2024.
The pressure had built over several weeks: the Composite fell 5.3% in October, and Thursday was the fifth session since mid-October in which it lost more than 500 points, according to the source’s calculation from index data. That recent weakness helps explain why the election became a focus, but it does not prove that one political event caused every part of the decline.
“Existing data centers become more valuable if fewer new ones get built.”
— A strategist quoted by Reuters
Policy Risks Remain Unresolved
No new federal law had passed to change data center permitting, tax incentives or infrastructure rules, according to the source material. President Donald Trump retains veto power, and analysts cited in the report expect possible gridlock rather than sweeping policy changes. The extent to which the new Congress or incoming governors will affect specific projects is not yet clear.
A UBS estimate cited in the source says about 30% of planned 2028 capacity additions could be at risk. That is an analyst estimate, not a government decision or confirmation that those projects will be canceled. The source does not identify the full project list behind the estimate or specify how much capacity, if any, has already been delayed.
The causes of the market’s daily move also cannot be separated precisely from the available material. It links investor concern to the election and data center economics, but does not quantify how much of the losses came from policy expectations versus company spending, valuations, trading or other market factors.
Permits and Spending in Focus
Investors are likely to watch for concrete signals from federal lawmakers, state officials and project developers: changes to permitting processes, tax incentives, power and water cost rules, and announced construction schedules. Those developments would help determine whether the concerns discussed after the election translate into actual changes to project economics.
Companies’ disclosures about capital spending, data center capacity and expected power needs may also clarify how much infrastructure they plan to build and who will bear the costs. Until policy decisions or project revisions are announced, the potential effect on planned capacity remains a forecast. The source material provides no specific next vote, regulatory decision or company announcement date.
Key Questions
How much did the Nasdaq Composite fall?
It fell 5.52%, or 1,421.51 points, to close at 24,315.00 on Nov. 5, 2026, according to Nasdaq index data.
What does the $2.5 trillion figure refer to?
Reuters estimated that amount of market value was erased from the Nasdaq-100, an index of 100 large non-financial Nasdaq-listed companies. It does not describe the value lost by every stock on Nasdaq.
Did the midterm elections change data center rules?
The source material reports investor concern about possible changes in oversight and incentives, but says no new federal law had passed. The effect of election results on particular projects remains unclear.
Are 30% of planned 2028 data center additions canceled?
No. The source cites a UBS estimate that about 30% of planned 2028 capacity additions could be at risk. It is a forecast, not confirmation of cancellations.
Source: Thorsten Meyer AI
