Tech stocks drop sharply after election results

The Nasdaq Composite Index lost 1,285 points in early-afternoon trading on Thursday, marking a 5% decline. This sharp drop followed a shift in congressional political control after the U.S. election. Investors reacted to concerns that the new political balance could slow the construction of data centers that power artificial intelligence services.

Technology companies involved in the AI sector took the heaviest losses. Wall Street analyst Adam Crisafulli of Vital Knowledge said the market is reacting to growing headline risks around AI. Market watchers noted that Democratic electoral victories this week could bolster opponents of data centers and the facilities that have drawn widespread public opposition.

Major indices across the market also fell. The S&P 500 dropped 287 points, or 3.7%. The Dow Jones Industrial Average plunged 1,542 points, a 2.9% decrease. Specific chip and AI-exposed stocks suffered significant hits. Nvidia shares fell 7.5%, becoming the heaviest weight on the S&P 500 after dropping 3.2% the previous day.

Other major players in the technology space saw steep declines. Advanced Micro Devices shares tumbled 14.6%. CoreWeave, a company that rents access to AI chips over the cloud, fell 12.1%. These specific losses highlighted the concentration of risk in the AI hardware and infrastructure sectors.

In other financial markets, the initial reaction to the election results softened slightly. The price of a barrel of Brent crude oil rose 2.6% to $97.11. This gain allowed the oil price to recover much of its nearly 9% drop from the day before. Uncertainty persists regarding the timeline for the war with Iran to end and when the global energy industry can return to normal operations.