AI chip stocks plunge after US midterm elections, Nasdaq enters correction territory

After the Democrats' landslide victory in the US midterm elections, markets worried about a slowdown in data center expansion. The Nasdaq Composite fell 5.4% on Thursday, entering correction territory, while the S&P 500 dropped 4%. Nvidia and Broadcom each fell 9%, Oracle dropped 8%, and the iShares Semiconductor ETF fell about 11%, its worst single-day performance since March 2020. Senator Bernie Sanders had previously called for a nationwide moratorium on data center construction, and investors are assessing the election results' impact on the AI capital expenditure cycle.