Technology stocks on Wall Street took a significant hit as investor apprehensions about artificial intelligence (AI) data center projects grew in the wake of the US midterm elections. The sell-off erased gains from the previous trading session and was compounded by a recovery in oil prices, further straining financial markets.
The Nasdaq Composite experienced a sharp decline on Thursday, with semiconductor companies among the hardest hit. Nvidia’s shares dropped over 6%, while Advanced Micro Devices (AMD) and Micron Technology saw declines of 12% and 11%, respectively. These companies are key suppliers of processors and memory chips essential for AI data centers, and their fortunes are closely tied to substantial investments in expanding computing infrastructure to support AI services.
Investor concerns stem from increasing opposition to large-scale data center developments across the United States. Many candidates who performed well in the midterm elections have advocated for restrictions or temporary pauses on new data center projects, citing worries about energy consumption, infrastructure demands, and potential impacts on local communities. This uncertainty around regulatory changes has shaken confidence in AI-related stocks, previously among the market’s strongest performers.
In parallel, oil prices rebounded after a sharp fall in the previous session. Brent crude rose by 2.3% to $96.79 per barrel, while US West Texas Intermediate crude climbed 2.4% to $90.26. The recovery followed expectations that political pressure in Washington might spur diplomatic efforts to resolve the conflict with Iran.
European markets showed mixed results, with major indexes in London and Frankfurt closing lower despite initial gains following the US election results. Asian technology stocks also felt the pressure, with South Korea’s benchmark index dropping more than 5%.
This latest market sell-off underscores growing investor uncertainty over the sustainability of AI investments, potential government restrictions on data center expansion, and shifts in global energy markets.