Nasdaq posts steepest drop in 19 months as US midterms spark concerns over AI and data center slowdown

The Nasdaq plunged 5.5% on Thursday into correction territory, marking its largest single-day drop in 19 months and wiping out over $2 trillion in market value. The broad sell-off was fueled by expectations that Democrats will tighten regulatory scrutiny following the US midterms, alongside growing fears that massive AI spending and data center expansions could face roadblocks, as local ballot measures in multiple regions rejected data center projects. Chip stocks led the downturn, which quickly spread across global markets; the Dow Jones Industrial Average dropped 3.4%, the S&P 500 lost 4.3%, and Wall Street's fear gauge, the VIX, surged 61%.