Donald Trump was celebrating Americans’ booming retirement accounts on Wednesday. By Thursday, he was blaming the Democrats for wrecking them. "Your 401(k)s have, therefore, dropped," the president complained on Truth Social after Wall Street suffered its worst sell-off since April 2025.
"Remember, it wasn’t Republicans, it was Dumocrats." This time, Trump has a point. A day after Democrats trounced Republicans at the midterm elections, investors began questioning whether the artificial intelligence boom that has powered Wall Street’s extraordinary growth under the Trump administration can continue apace. Much of the concern centers on the Democrats’ increasingly hostile attitude toward data centers—the enormous, electricity-hungry facilities underpinning AI development.
On Thursday, the technology-heavy Nasdaq plunged 5.5 percent, wiping out roughly $2.5 trillion in market value. The S&P 500 fell 4.4 percent, while Nvidia, the chipmaker at the center of the AI revolution, shed 9.3 percent. These losses will trouble Silicon Valley billionaires, but they’ll be OK.
Millions of Americans who hold shares in the companies driving the AI boom through their 401(k)s and other retirement accounts, perhaps less so. Texas Governor-elect Gina Hinojosa has promised to pause new data-center approvals until the state introduces stronger protections for local communities. Other Democrats have campaigned on similar restrictions, raising the prospect that America’s extraordinary AI construction boom could face significant obstacles.
But the Democrats didn’t create the industry’s problems. Investors had been fretting for months about whether the hundreds of billions of dollars being poured into AI infrastructure would generate sufficient profits to justify the expenditure. Rising borrowing costs had already battered debt-heavy AI companies, while the Nasdaq was already more than 8 percent below its October 6 peak on Election Day.
If there’s an AI bubble, the Democrats didn’t inflate it; their victory was just another pin in the hands of nervous investors. Americans can hardly be upset or surprised by these consequences. An October ABC News/Washington Post/Ipsos poll found that 72 percent of Americans oppose the construction of new data centers in their communities, including 58 percent of Republicans.
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