A sharp, technology-led stock market rout following the U.S. midterm elections wiped trillions of dollars from American companies. However, its scale so far remains well short of the crashes that defined previous financial crises. The Nasdaq Composite fell 5.52 percent on Thursday, November 5, entering correction territory at more than 10 percent below its October record.
The S&P 500 dropped 4.36 percent, the Dow Jones Industrial Average lost 3.44 percent and nearly $3 trillion was erased from the value of S&P 500 companies, according to Yahoo Finance. It wiped an estimated $113 billion from tech billionaire Elon Musk’s paper wealth over two days as shares in Tesla and SpaceX fell, according to the Bloomberg Billionaires Index. Despite the decline, Musk remained the world’s richest person, with an estimated fortune of $785 billion.
President Donald Trump responded by blaming Americans for how they voted in the elections, posting on his Truth Social platform: "The Stock Market crashed today because the Dumocrats had a big Tuesday — So sad to see, you only have yourselves to blame!" Technology stocks led the decline as investors reassessed the outlook for AI infrastructure after Democrats won control of Congress and scored victories in several states where data-center development had become an election issue. Nvidia fell 9 percent, Broadcom lost 10 percent and an exchange-traded fund tracking semiconductor companies dropped more than 12 percent. Trump said in a separate Truth Social post after the sell-off that he was "100% in favor" of what his administration calls "Super Intelligence." He added that he would work with states that welcome its development, describing the technology as "gold." Trump's intervention suggested the White House could seek to support AI projects in states that remain receptive even as newly elected officials elsewhere consider tighter rules for data centers.
The sell-off inflicted sharp one-day losses, particularly on technology companies, but the broader market remains far short of the threshold commonly used to define a bear market. On the broadest comparable measure, the S&P 500 remained approximately 6 percent below its record after Thursday’s close. That is significantly smaller than the 20 percent decline commonly used to identify a bear market and far below the peak-to-trough losses suffered during previous crashes.
The present sell-off has some similarities with the early stages of the dot-com reversal, although it remains far smaller. Both the dot-com episode and the current downturn followed enthusiasm for a transformative technology and concern that investment had run ahead of near-term returns. Many dot-com businesses had little revenue and no viable path to profitability.
Today’s largest AI companies include profitable businesses with established customers and substantial cash flow. Morgan Stanley said the election results could create delays and tougher restrictions for data-center projects, particularly at state level, while maintaining that the broader AI capital-expenditure cycle remained intact. The technology comparison becomes more severe when placed beside the full dot-com collapse.
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