Dow Falls 1,220 Points as Midterm Results Rattle AI Stocks

The Dow Jones Industrial Average lost 1,220 points on Thursday, a decline of 2.2 percent that wiped out most of the previous day's surge. This sharp drop followed a session on Wednesday where the index jumped 1,570 points, its best performance since April 9, 2025.

Investors reacted to Tuesday's midterm election results, which saw Democrats secure victories in Senate and gubernatorial races in Republican strongholds such as Ohio and Texas. The party also appears set for a majority in the House. These states host numerous artificial intelligence data centers, raising concerns about future regulatory environments for the tech sector.

The S&P 500 dropped 3.2 percent, while the tech-heavy Nasdaq fell 4.8 percent. The Nasdaq's loss pushed the index into correction territory, defined as a fall of more than 10 percent from its recent peak. Many investors focused on companies heavily involved in AI infrastructure as they priced in the political shift.

Major AI hardware and software firms saw steep losses. Nvidia, a leading chipmaker, dropped 7 percent. Advanced Micro Devices fell 12 percent, and SanDisk lost more than 15 percent of its value. Microsoft, which holds a stake in OpenAI, and Amazon, a major spender on AI infrastructure, both saw their stocks decline by more than 2 percent.

Dan Ives, an analyst at Yorkville, warned of potential fallout for the tech sector ahead of the market close on Wednesday. Ives stated that the Democratic gains in the Senate and House represented a major shift that would likely slow the pace of AI development in the United States over the coming years.

In response to the election outcome, OpenAI released new data center policies on Thursday. The company described the measures as responsible AI infrastructure. OpenAI pledged to pay for all electricity and infrastructure used at its facilities. It also announced it would create a water plan for each location to protect local resources and generate employment opportunities for local workers and businesses.

The market volatility marked a rapid reversal of the optimism seen during the post-election rally on Wednesday. Traders now monitor how the newly empowered Democratic legislators will approach AI data center projects in states like Ohio and Texas.