Dow Jones, S&P 500 plummet as Democrats vow to halt AI, data centers following midterm sweep

The markets and investors have grown fearful that the forthcoming Democrat-controlled Congress will halt the build-out of more data centers and technology, leading to a large sell-off, tanking major stocks and indexes.

Stocks plummeted on Thursday, erasing the slight gains that were seen in the wake of the midterm elections as fears spooked investors on AI-related stocks. The stock price for Nvidia dropped 8 percent, erasing all gains that had been made on the stock in 2026. Similarly, Microsoft, Intel, Google, and the major tech stocks saw major sell-offs. In the span of just a few hours, over $3 trillion was erased from the stock market.

The Nasdaq composite declined by 5.2 percent, the S&P 500 declined by 4.2 percent, and the Dow Jones fell by 1800 points. The sell-off has largely been attributed to fears that there will be heavy regulation and pauses on AI technology.

One post from a Democrat that was making the rounds on X that stoked the fears came from Congresswoman Yassamin Ansari. She wrote, "Top of the Democratic agenda on day 1 needs to be a pause on advanced AI development, regulation of this out of control industry, and a ban on artificial superintelligence."

The post has over 12 million views. Senator Bernie Sanders—who previously held an anti-AI panel with two Chinese scientists on Capitol Hill—posted a video to X, saying that Democrats "must enact a national moratorium on AI data centers, must pause advanced AI development, and ban superintelligence."

Investors are “stepping away until they get a better sense of the implications of the midterms around the AI capex cycle in particular, which is the biggest economic tailwind we’ve had going for us for the last, call it, three years,” Tim Holland, the chief investment officer at Orion told CNBC. “It’s about tone and tenor from the party that did really well, incredibly well, at the federal level and at the state level.”